Paid-up Policy
Paid-up is piece of insurance industry jargon that means all required premium payments have been made. Your insurance policy may become paid-up in one of two ways:
- the policy may continue in operation after you have stopped paying regular premiums simply because the stipulated payment term is shorter than the policy term;
- you, as the policyholder, may have approached your life insurance company to request that no more premiums be payable, halting future contributions to the policy but still letting it run to maturity.
In the latter instance, your policy benefits are likely to be affected by the reduced amount of premiums paid and may need to be recalculated. The revised sum assured will be described as the paid-up sum assured.
Although you may face a lower payout on maturity by making a policy paid-up such a move does avoid any potential surrender penalties you may face for stopping the policy completely.
If you decide you do want to stop or cancel the payment of regular monthly premiums on any insurance policy, you must discuss the situation with your policy provider to check what impact doing so will have on your policy cover and benefits.