I want to invest in an insurance plan. While going over the key features, I came across the term “paid-up policy”. What does it mean? If a policy is declared paid up, does it impact the sum assured?
If the premium on a life insurance policy for a minimum specified period is paid in full, the policy may continue even if no subsequent premiums are paid. Such policies are paid-up policies.
There is an impact on the sum assured if the policy is declared paid-up.
For instance, if six out of the originally stipulated 30 premiums are paid, the paid-up sum assured under a paid-up policy could still be 20% of the original sum assured of the policy (premiums paid divided by total premiums payable).
