Have you ever asked yourself what was Paid Up Additions (PUAs) when it was presented to you by your Insurance adviser? Did you still not understand what it meant after it was explained? Don’t worry, some insurance advisers still can’t explain the concept. Paid Up Additions Rider in your Life Insurance policy gives you tons of flexibility. You fully pay up your insurance policy at any given point. It doesn’t require any more premiums to be paid to keep the policy in force.
Depending on an insureds age at the time the PUA is purchased, the owner is able to purchase a certain amount of life insurance. This option allows an individual to automatically increase the value of the death benefit without having to undergo another dreaded medical exam process. I mean seriously, who likes those anyway?
There are usually two ways you can purchase PUAs
Every time a payment is made to purchase PAU, there is an increase in the amount of cash value the policy has. Feel free to review When does Whole Life Insurance Make Sense for more details on Whole Life Insurance.
Another option a policyholder has when using PUAs is to surrender the PUAs for their cash value. As a result, the death benefit and cash surrender value would be reduced
For more information on identifying the right insurance for you, book an appointment with an insurance adviser today.