A paid-up life insurance policy is generally a life insurance policy that the insured will pay ‘up front’ so that they may not have to pay any premiums later in life.  Typically, with paid-up life insurance, the insured may have a choice on how long they will take to pay off the premium such as 10 to 20 years for example.  Generally, once the premiums are paid off then the insured will be able to relax and may not have to worry about making more premium payments later in life.

Pros of Paid-up Life Insurance

As mentioned above, paid-up life insurance may offer retirees and others the security of having not to pay premiums for their life insurance when their income may have been reduced due to retiring or other events.  While the insured typically will not have to pay any more premiums once they have paid it up front, they will still typically be covered by their life insurance policy and may be able to relax a little more knowing that they are covered without worry about having to make monthly premium payments.

Cons of Paid-up Life Insurance

The most obvious disadvantage is that typically with paid-up life insurance the insured will usually be paying a lot more up front instead of having their payments lower each month and lasting longer.  This may be a lot of money for some to be able to afford and may discourage them from this route.  Another disadvantage is that some paid-up life insurance policies may not be guaranteed which may mean that the insured could lose some of their final benefits if the economy has a hard impact on the insurance company.

Getting life insurance quotes may be the best option before choosing any life insurance policy.