What Happens When Term Life Insurance Is Paid Up?
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63333 POINTSview profilePeggy MaceMost of the U.S.Term Life Insurance does not have the option to become paid up, like permanent life insurance does. If you pay your policy each month through to the end of the term, the policy simply ends or takes on a higher cost. There is nothing to cash in. Also, you do not have the option to pay term at an increased cost for a shorter time period, like you do with permanent insurance. If you quit paying on it at any time, the policy ends.Answered on July 31, 2014flag this answer
10968 POINTSview profileTim WilhoitOwner, Your Friend 4 Life, Brentwood TNActually term life insurance cannot be paid up. It just expires or has a steep premium increase many times 1,000%. The cash value policies such as whole life, universal life, indexed universal life or variable universal life do endow or are "paid up" plans in which you are asking. Sorry!Answered on July 31, 2014flag this answer
5527 POINTSview profileMarlin McKelvyPresident, Consumer Directed Benefit Solutions, Memphis, TennesseeTerm life insurance is never paid up. Assuming you make your premium payments, if you are still alive at the end of the term life insurance policy's stated time period (e.g. - 10 years) the policy ends and the life insurance protection ceases. In this case the insurance company has won the bet, you didn't die during the period the policy was taken out for and they get to keep all the premium paid for taking on your risk during that time period. The only exception to this general rule is in the case where a Return of Premium rider was purchased with the term life policy. In this situation if you are still alive when the term life policy reaches the end of its stated period of coverage the policyholder is refunded the premium they have paid to the insurance company over the life of the policy. You do pay additional premium costs for this Return of Premium provision.Answered on July 31, 2014flag this answer
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