Principal, LifeNet Insurance Solutions, Redmond, WA
Many permanent type policies can be "paid up" meaning that no further premiums are due on the policy for it to stay in force until the insured's death. There are several ways to do this from making a single payment which is often done at older ages, to "7 pay life" which spreads the entire policy premiums equally over the first seven years. Other options also exist depending on the type and special options of each individual carrier.
A life insurance policy is paid up when you don't owe any more premiums on the policy. At that point, all the obligation is on the part of the insurance company to pay you according to the terms of the contract, as your part in paying them has been completed.
In a reduced paid up policy, you choose to quit paying premiums before the scheduled time, in exchange for a policy that has a lower face amount than originally agreed upon.
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In a reduced paid up policy, you choose to quit paying premiums before the scheduled time, in exchange for a policy that has a lower face amount than originally agreed upon.