Other Products
NYLIFE Securities
MainStay Mutual Funds
Retirement Plan Services
Quick Links
While many people are familiar with the term “paid-up life insurance,” some mistakenly assume that it is a type of policy they can purchase outright—such as a term or universal life policy. This article will attempt to clear up any confusion that exists by explaining what “paid-up insurance” actually means, how you get it, and why it can be such a valuable tool.
While many people think “paid-up life insurance” is a type of policy they can purchase, it’s actually a state or condition where your coverage is paid-in-full (fully funded) and you do not need to make any additional premium payments in order to maintain the policy. Since this can be an attractive feature for many policy owners—especially those who are looking to control costs in the future—it’s important to remember that this option is usually available only on whole life policies.
There are several ways to fully fund your policy (pay if off faster). Since each operates very differently, let’s take a moment to explore three options:
As you can see from the example below, a whole life policy features a guaranteed death benefit2, which is the face value of the policy at the time it is purchased. Each time dividends are declared, you can use them to purchase more coverage and increase your total death benefit protection.
There are lots of reasons why you may want to pay off (fully fund) your coverage: an increased or decreased need for coverage, future budgetary concerns, or the desire to build cash value faster are just a few. But as we’ve seen, the way to go about it can have a major impact on your level of protection. That’s why it is so important to consult a New York Life financial professional before making any decision.
*New York Life Insurance Company is the issuer of New York Life Whole Life. In Oregon, the Whole Life policy form number is ICC18217-50P (4/18).
1 Dividends are available on participating whole life policies and are not guaranteed. When declared, dividends are awarded annually.
2 Any guarantees of the policy are based on the claims-paying ability of the issuer.