Co-Founder, Coastal Financial Partners Group, California
A life insurance policy is paid up when all required annual premiums have been paid. If the policy is a "whole life paid up at age 95" contract, the policy is paid up at age 95.
It is important to note that the term "paid up" is often misused. In whole life policies that pay policy dividends, the dividend values are frequently used to buy "paid up additions" which are paid up, additional amounts of insurance that have cash value and add to the base policy. The cash value of paid up additions may be projected, based on the current dividend scale, to grow to a point in the future where those values may be used to premiums on the base policy. The policy is not paid up when the policy owner pays premiums this way.
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It is important to note that the term "paid up" is often misused. In whole life policies that pay policy dividends, the dividend values are frequently used to buy "paid up additions" which are paid up, additional amounts of insurance that have cash value and add to the base policy. The cash value of paid up additions may be projected, based on the current dividend scale, to grow to a point in the future where those values may be used to premiums on the base policy. The policy is not paid up when the policy owner pays premiums this way.