Q&A: What is “paid up” life insurance?

Question by Vindaloo99: What is “paid up” life insurance?
I have been paying on a life insurance policy for many years.
Using round numbers to make the example clear …the policy now has “$ 50k paid up insurance”. The death benefit is $ 100k. Is it true that if I keep paying the premium, the policy will always pay $ 100k upon death, but if I stop paying the premium right now, it will alwasys pay $ 50k on death? Is that what Paid Up means? And in deciding whether to contimue paying the premium, I should decide whether the “second $ 50k” of coverage is worthwhile, or whether I can get $ 50k of coverage somewhere else for a lower premium. Is that right?

Best answer:

Answer by Go with the flow
This sounds like one of these whole life, cash value insurance policies.
Consider calling them up and cashing out.
Do you even have any dependents that can’t live without your income?
If no, then 100% cancel this.
Put the money in a cd instead to pay for your final expenses.

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1 comment to Q&A: What is “paid up” life insurance?

  • Insurance Pickle.com

    I don’t think you understand your policy. The policy has one death benefit – whether you’re paying the premiums or whether the policy is sustaining itself. If it’s “paid up” then you don’t owe anymore premiums. And, you also CAN’T pay anymore premiums. I’m guessing that your policy is at the point where it MAY be able to sustain itself without further payment.

    The above responder is giving reckless information by telling you to cancel something they don’t understand.

    You should find someone you can trust to explain the policy to you.

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