Co-Founder, Coastal Financial Partners Group, California
If a life insurance policy is "paid up" it simply means no further premiums are due. Some whole life policies are designed to be paid up at a relatively early duration e.g. Policy Year 20, Age 65, etc. The premiums for these policies are relatively high as a result. In comparison, in most cases, whole life policies are designed to have required premiums to age 95 or 100 or later. Such policies have relatively low premiums.
It is important to note that policies which use policy dividends and/or the cash value of Paid Up Additions to offset the required premiums due at some future point are not "paid up".
When life insurance is paid up, it simply means that no further premiums are required to keep the policy in force.
The policy may have been set up to where you only needed to pay a single premium in a lump sum. Or it may have required that you paid premiums for a certain number of years, and then it became paid up. In any event, you owe no more premiums and your beneficiary would receive the full face amount or more, if you passed.
Or you may have decided to quit paying on the policy early, and were given the option to take it as a reduced paid up policy. In this case, the face amount will be less than what you originally applied for, but the reduced face amount will stay in effect without you paying any more premiums.
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It is important to note that policies which use policy dividends and/or the cash value of Paid Up Additions to offset the required premiums due at some future point are not "paid up".
The policy may have been set up to where you only needed to pay a single premium in a lump sum. Or it may have required that you paid premiums for a certain number of years, and then it became paid up. In any event, you owe no more premiums and your beneficiary would receive the full face amount or more, if you passed.
Or you may have decided to quit paying on the policy early, and were given the option to take it as a reduced paid up policy. In this case, the face amount will be less than what you originally applied for, but the reduced face amount will stay in effect without you paying any more premiums.