RPU Life Insurance: The Ultimate Guide to Premium-Free Coverage
Looking to maintain your life insurance coverage without the burden of ongoing premiums? Reduced Paid-Up (RPU) insurance transforms your existing whole life policy’s cash value into permanent, premium-free coverage with a reduced death benefit. This strategic option serves as a financial lifeline when priorities shift, budgets tighten, or retirement approaches. Discover how RPU can protect your legacy while eliminating future payment obligations.
Table of Contents
- Key Takeaways
- What is Reduced Paid-Up Life Insurance?
- How the Reduced Paid-Up Non-Forfeiture Option Works
- Electing a Reduced Paid-Up Non-Forfeiture Option
- Understanding the Cash Value to Death Benefit Relationship
- Tax Benefits of Reduced Paid-Up Insurance
- Who Should Consider Reduced Paid-Up Life Insurance?
- Common Use Cases for Reduced Paid-Up Insurance
- Policy Loans with Reduced Paid-Up Insurance
- How Paid-Up Additions Work with RPU
- Drawbacks of Reduced Paid-Up Insurance
- Alternatives to Reduced Paid-Up Life Insurance
- Comparing RPU with Other Non-Forfeiture Options
- Example Success Stories with RPU
- Frequently Asked Questions
Key Takeaways
- Reduced Paid-Up (RPU) Insurance allows policyholders to maintain life insurance coverage without further premium payments by reducing the death benefit based on the policy’s accrued cash value.
- Eligibility for RPU typically requires the whole life policy to have been in place for a minimum period (usually 3+ years) and/or to have received a minimum total amount in premiums.
- Benefits of RPU include retaining permanent life insurance coverage without future premium obligations, making it ideal for individuals experiencing financial changes or those who no longer need the full original death benefit.
- Impact on Cash Value and Death Benefit: Electing RPU converts the policy’s accrued cash value into a paid-up policy with a lower death benefit, but the policy continues to grow in value and may still earn dividends.
- Tax Advantages: RPU allows policyholders to avoid the potentially significant income tax consequences of surrendering a policy with substantial cash value growth.
- Considerations Before Election: It’s important to consider the irreversible nature of RPU, the reduced death benefit, potential loss of riders, and the inability to reinstate the original coverage or death benefit amount once RPU is elected.
What is Reduced Paid-Up Life Insurance?
Reduced paid-up insurance is an optional contractual feature in dividend paying whole life insurance policies that allows you to stop paying premiums while still keeping a portion of your coverage for life. It works by using the cash value you’ve built up over time in your policy to buy a smaller, fully paid-up insurance policy.
This means you won’t have to pay any more premiums, but you’ll still have life insurance coverage, just with a lower death benefit amount. Almost every whole life insurance policy includes a “reduced paid-up non-forfeiture option.”
What you are doing is decreasing a policy’s death benefit to a level where, based on the premium payments to date, the policy would have been paid-up, creating a reduced paid-up whole life insurance policy that remains in force for your entire lifetime.
How the Reduced Paid-Up Non-Forfeiture Option Works
To get a better understanding of a reduced paid-up policy, let’s break down the concept to its component parts.
- “Reduced” – When you exercise a reduced paid-up policy option, you are reducing the policy’s death benefit in exchange for removing any obligation to pay further premiums;
- “Paid-Up” – The whole life policy is now effectively paid-in-full; the cash value that is traded in constitutes a single, lump-sum premium payment sufficient to keep the whole life policy in place for the rest of your life;
- “Non-Forfeiture” – The reduced paid-up life insurance policy cannot be forfeited or lapse in the future because all premiums have been paid in advance;
- “Option” – reduced paid-up is an option because it’s something you can but are not required to do; there are certain eligibility criteria, but once you meet them, you have a contractual right to elect the RPU option.
Reduced Paid-Up Insurance Example
An example of how it works would be Tom, who has a $850,000 whole life insurance policy he purchased eight years ago that has accrued cash value of $100,000. Based on factors, such as his age and the total cash value account balance, the insurance company provides an offer to Tom for a fully paid-up whole life insurance policy.
In this example, the cash value of $100,000 was able to purchase a $250,000 death benefit. The policy’s guaranteed death benefit is now reduced to the new amount and no more premiums are due. And Tom’s now paid-up insurance policy still earns interest and potential dividends going forward.
Calculation Example: The formula used to determine the new death benefit varies by insurer, but generally follows this pattern: New Death Benefit = (Current Cash Value ÷ Net Single Premium Rate for Current Age) × 1000
For a 55-year-old with $100,000 cash value, if the net single premium rate is $400 per $1,000 of coverage:
New Death Benefit = ($100,000 ÷ $400) × 1000 = $250,000
The exact rate varies by insurer, age, and policy specifics, which is why the same cash value amount might yield different death benefits depending on these factors.
Electing a Reduced Paid-Up Non-Forfeiture Option
The precise eligibility criteria and requirements to activate an RPU option vary between policies and insurance companies. With any whole life policy, before the option can be elected, the policy must have been in place for a minimum period and/or have received a minimum aggregate sum of premiums.
Typically, if you want a reduced paid-up insurance policy then three years is typically the required minimum period, but some policies require longer, and if you have made additional premium payments, an insurance company might allow you to make the election earlier.
The Election Process
To elect the RPU option, follow these general steps:
- Contact your insurer – Request information about your RPU option and the projected reduced death benefit
- Review the offer – Examine the proposed reduced death benefit and ensure it meets your needs
- Complete required forms – Fill out the insurer’s RPU election forms
- Submit documentation – Return the forms to your insurance company
- Receive confirmation – Wait for written confirmation that your policy has been converted
Once the election is complete, your policy will be permanently modified to the new reduced death benefit amount with no further premium obligations.
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Understanding the Cash Value to Death Benefit Relationship
When you opt for RPU, the new death benefit will be at least equal to the current cash value. The insurance company uses multiple factors to make the precise calculation, including how long the policy has been in place, the total premiums paid, the current cash value, and your age.
Generally, a policy that has been in place longer will have accrued a higher cash value and therefore receive a higher death benefit.
Likewise, any prior premium over-payments raise the cash value, leading to a higher adjusted death benefit.
All things being equal, a younger policyholder will receive a higher reduced paid-up insurance death benefit because the insurer anticipates having more time to invest the premium before paying out the death benefit.
Continued Growth After RPU Election
Importantly, after a reduced paid-up option is exercised, the policy still has cash value. So, you can still take loans against the policy or surrender it for cash or an annuity – should you so choose. And, the reduced paid-up insurance policy is still a whole life policy, so it will continue to earn interest and may receive life insurance dividends even though no further premium payments are made.
This continued growth is a significant advantage over other non-forfeiture options like extended term insurance, where the cash value generally doesn’t continue to grow.
Tax Benefits of Reduced Paid-Up Insurance
One of the most significant advantages of RPU is its ability to help policyholders avoid tax consequences that would otherwise arise from surrendering a policy with substantial cash value growth.
Tax Comparison: Surrender vs. RPU
Additional Tax Considerations
Beyond the immediate tax advantages, RPU offers several other tax-related benefits:
- Estate Tax Planning: The death benefit remains income-tax-free to beneficiaries
- Tax-Free Access: Policy loans remain tax-free even after RPU election
- Tax-Deferred Growth: Any growth in cash value continues to accumulate tax-deferred
- No AMT Implications: Unlike some other tax strategies, RPU does not create alternative minimum tax exposure
For individuals in higher tax brackets approaching retirement, these tax benefits can be particularly valuable as part of a comprehensive financial strategy.
Who Should Consider Reduced Paid-Up Life Insurance?
Recent Retiree
An RPU option can be beneficial for individuals who want or need some life insurance but whose situation has changed – such as recent retirees – so that it no longer makes sense to pay premiums and maintain the current level of coverage.
Tight Budget
Or someone who wants to retain a death benefit but can no longer afford monthly premiums can prevent a policy from lapsing by exercising an RPU option.
From a tax-savings standpoint, an RPU election can be advantageous for an insured looking to avoid the income tax hit involved in cashing out a policy that has substantially appreciated.
Because a life insurance pay-out is not taxable income and policy proceeds can easily be kept out of a taxable estate, a reduced paid-up insurance policy minimizes tax consequences while still avoiding further premiums or a policy lapse.
Common Use Cases for Reduced Paid-Up Insurance
Reduced paid-up insurance serves as an effective financial tool in various life situations. Here are some common scenarios where RPU might be the optimal choice:
Retirement Transition
Meet Barbara: At 67, Barbara has just retired after a successful career. She has a $500,000 whole life policy she’s funded for 25 years with $150,000 in cash value. Her children are financially independent, and she wants to reduce expenses while maintaining some coverage for final expenses and legacy planning.
RPU Solution: By electing RPU, Barbara converts her policy to a $225,000 death benefit with no further premiums. This allows her to:
- Eliminate her $450 monthly premium payment
- Maintain permanent coverage for estate liquidity
- Keep the tax advantages of life insurance
- Preserve access to cash value for emergencies
Financial Hardship
Meet Carlos: At 45, Carlos lost his job during an economic downturn. He has a $750,000 whole life policy with $85,000 in cash value but can no longer afford the $800 monthly premium. However, he still wants to maintain coverage for his family.
RPU Solution: By choosing RPU, Carlos secures a $180,000 death benefit without ongoing premiums. This allows him to:
- Maintain permanent protection for his family
- Eliminate premium payments during financial uncertainty
- Keep a policy that continues to grow in value
- Have the option to take policy loans if needed
Policy Loan Recovery
Meet Jennifer: At 58, Jennifer has a $400,000 whole life policy with $125,000 in cash value. She’s taken a $70,000 policy loan for her business that she’s struggling to repay, putting her policy at risk of lapsing.
RPU Solution: By electing RPU, Jennifer can:
- Convert to a smaller policy (approximately $110,000 death benefit)
- Keep the outstanding loan without repayment pressure
- Eliminate future premium obligations
- Avoid policy lapse and potential tax consequences on the loan
Estate Planning Enhancement
Meet William: At 72, William has a $1 million whole life policy with $450,000 in cash value. He has substantial other assets and wants to simplify his estate while maintaining tax benefits.
RPU Solution: By converting to a reduced paid-up policy with approximately $650,000 death benefit, William can:
- Eliminate his $1,500 monthly premium
- Maintain a significant tax-free death benefit for heirs
- Simplify his estate planning
- Potentially use the premium savings for other estate planning tools
Policy Loans with Reduced Paid-Up Insurance
After electing RPU, your ability to take policy loans remains intact, with some important considerations:
How Loans Work After RPU
When you convert to a reduced paid-up policy, any existing loans remain in place against the new, lower death benefit. New loans can be taken following the same process as before:
- Application: Request a loan from the insurance company
- Collateral: Your cash value serves as collateral
- Interest: Loan interest accrues (typically 4-8% depending on the insurer)
- Death Benefit: The outstanding loan plus interest is deducted from the death benefit upon payout
Considerations for Policy Loans After RPU
- Lower Borrowing Capacity: With a reduced death benefit and potentially lower cash value, your maximum borrowing capacity decreases
- Impact on Growth: Policy loans may affect dividend payments and cash value growth
- Loan Interest: Interest continues to accrue on outstanding loans and new borrowing
- Tax Implications: Loans remain tax-free as long as the policy remains in force
Strategic Uses of Policy Loans After RPU
- Emergency Fund: Access to capital without credit checks or approval processes
- Investment Opportunities: Capital for investments during market downturns
- Income Supplement: Tax-free income through systematic policy loans
- Flexible Repayment: No required payment schedule (though interest accrues)
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How Paid-Up Additions Work with RPU
Understanding Paid-Up Additions
The right to purchase paid-up additions is offered through policy riders that usually require a higher starting premium. It is often described as buying paid-up miniature life insurance policies that act as a supplement to a primary whole life insurance policy. The mini-policies are purchased in full using dividends and require no additional premiums (hence ‘paid-up addition’). Once a paid-up addition is purchased, its death benefit is guaranteed for life.
Paid-Up Additions After RPU Election
When you convert to a reduced paid-up policy, the interaction with paid-up additions riders depends on your specific policy. Here’s what typically happens:
- Rider Continuation: In many cases, paid-up additions riders survive the RPU election, allowing continued growth through dividends
- Reduced Dividends: The smaller death benefit typically generates smaller dividend payments, resulting in smaller paid-up additions
- Recovery Period: Over time, as the policy continues to earn dividends, the paid-up additions can gradually increase the death benefit
- No Premium PUAs: The option to purchase paid-up additions through additional premium payments usually ends after RPU election
Growth Potential Example: Consider a $500,000 policy converted to a $200,000 RPU policy with a strong PUA rider:
- Year 1 after RPU: $3,000 dividend purchases $6,500 in paid-up additions
- Year 5 after RPU: Cumulative paid-up additions have increased death benefit to $232,000
- Year 10 after RPU: Cumulative paid-up additions have increased death benefit to $275,000
- Year 20 after RPU: Cumulative paid-up additions have increased death benefit to $350,000
This example shows how dividends purchasing paid-up additions can significantly rebuild death benefit over time, potentially recovering a substantial portion of the original coverage.
Maximizing Paid-Up Additions with RPU
To optimize your paid-up additions after an RPU election:
- Dividend Option: Ensure your dividend option is set to “purchase paid-up additions”
- Policy Selection: Choose mutual insurance companies with strong dividend histories
- Timing: Consider policy performance and dividend scales before making the RPU election
- Monitor Growth: Track how paid-up additions increase your death benefit over time
Drawbacks of Reduced Paid-Up Insurance
Reduced Death Benefit
The obvious drawback to an RPU election is that the policy’s death benefit is reduced. So, if you’re still relying on the full amount of the benefit to provide for your loved ones, fund a trust, or pay estate expenses, you probably shouldn’t make an RPU election.
But if you have reached a point where you don’t need as much or any life insurance, reduced paid-up insurance can make sense. If your other assets will be sufficient to take care of any dependents, electing RPU to halt premium payments and free up funds in your budget can be a good financial move.
Irrevocable Decision
Reduced paid-up insurance elections are irrevocable. Some states and policies allow for reinstatement within a certain amount of time, usually requiring the policyholder to catch up on premiums.
But, in most cases, once a policy is converted to RPU, there’s no going back, so you are relieved of the obligation to pay future premiums, but you cannot choose to pay additional premiums either.
May Lose Riders
Another consideration is that paid-up insurance coverage provided after an RPU election is usually more stripped down than prior to the election, in life insurance riders may not survive the transition. So, if you’re counting on a rider that triggers coverage in the event of a terminal illness or severe injury, for example, an RPU election might not be a good idea.
Comparing RPU with Other Non-Forfeiture Options
When considering what to do with your whole life policy, it’s important to understand how RPU compares to other available options:
| Feature | Reduced Paid-Up | Extended Term | Cash Surrender | Premium Offset |
|---|---|---|---|---|
| Coverage Duration | Lifetime | Temporary (Term) | None | Lifetime |
| Death Benefit | Reduced | Full (temporary) | None | Full |
| Future Premiums | None | None | None | Paid by dividends/growth |
| Cash Value Growth | Continues | None | None | Limited (used for premiums) |
| Dividend Eligibility | Yes | No | No | Yes |
| Access to Cash Value | Yes (loans/withdrawals) | No | One-time payout | Limited (loans possible) |
| Tax Implications | None immediate | None immediate | Potential taxable gain | None immediate |
| Reversibility | Generally irreversible | Irreversible | Irreversible | Can resume premium payments |
| Best For | Long-term needs with reduced budget | Temporary coverage needs | Immediate cash needs | Maintaining full coverage with minimal cash flow impact |
Alternatives to Reduced Paid-Up Life Insurance
A reduced paid-up policy is a great option to have available but before you make the decision to exercise your contractual right, consider some alternatives.
Premium Offset
Premium offset is a whole life strategy under which a policyholder applies the policy’s dividends, growth, and any previous additional premium payments toward future premiums.
Premium offset maintains the policy’s death benefit but limits future growth because some or all of the growth is applied toward underwriting costs (i.e., premiums) rather than cash value.
Unless the policyholder has pursued overfunded life insurance and made substantial premium over-payments, a policy will have to have been in place for many years before dividends and growth are sufficient to sustain it.
Premium offset differs from reduced paid-up insurance in that the former can be elected temporarily. So, for example, a policyholder can choose to offset premiums with dividends and growth for a year or two and then resume payments if warranted by market conditions or personal financial circumstances.
Surrender
“Surrendering” a whole life insurance policy basically means electing to forego the death benefit and instead receive the cash value in the form of a lump-sum check or annuitized payments from the insurance company.
For this reason, a policy’s cash value is also sometimes referred to as its “surrender value.”
Surrendering a whole life policy for cash makes sense in some situations, but cashing out is by no means the only option for taking advantage of cash value.
This is because cash value is not just a theoretical sum the insurer is willing to pay now to avoid a future obligation to pay the death benefit.
It is an actual financial asset – a separate account that grows with each premium payment and earns interest.
Life Insurance Loan
After a whole life policy has been in place long enough, the policy’s cash value can serve as collateral for a low-interest loan from the insurance company or certain banking institutions.
Cash-value loans, which are usually not included in credit reports, come with attractive terms because they are low-risk to the insurance company – if you don’t repay the loan before dying, the outstanding amount is simply deducted from the policy’s death benefit.
Extended Term Insurance
Another approach is to surrender a whole life insurance policy and apply the cash value as a lump-sum, upfront premium payment for an extended term insurance policy that doesn’t require any further premiums for the duration of the policy. Depending on your age, health, and total premiums paid, this can end up being a good deal, but, of course, you no longer have permanent life insurance. So, if you outlive the term, you won’t receive any pay-out.
Examples of How Policyholders Might Use RPU
Understanding how reduced paid-up insurance could be applied in real-life situations helps illustrate its potential benefits. Here are hypothetical scenarios based on how policyholders might use this strategy:
Retirement Scenario: “Robert’s Strategy”
“After contributing to my whole life policy for 22 years, I was approaching retirement with a $750,000 policy and approximately $280,000 in cash value. I no longer needed the full death benefit since my children were financially independent, but I didn’t want to surrender the policy and pay taxes on the gains.”
“I elected the reduced paid-up option and converted to a $420,000 death benefit with no more premiums. This freed up $650 monthly that I was able to put toward other retirement expenses. Eight years later, my policy has grown to a $475,000 death benefit thanks to dividends purchasing paid-up additions, and I’ve taken two policy loans for renovations without affecting my retirement income.”
This example represents how a retiree might benefit from RPU, though individual results will vary based on policy specifics, company dividend performance, and other factors.
Financial Change Scenario: “Sarah’s Adaptation”
“When I went through a divorce at 52, my financial situation changed dramatically. I had a $500,000 whole life policy with about $95,000 in cash value that I’d been paying into for 15 years, but the $450 monthly premium became unaffordable.”
“Rather than surrendering the policy, I used the reduced paid-up option to convert to a $175,000 policy with no further premiums. During the market crash of 2020, while my 401(k) was down significantly, I took a $30,000 loan from my policy’s cash value to cover expenses instead of selling investments at a loss. This strategy allowed me to maintain valuable coverage during a challenging financial period while providing liquidity when I needed it most.”
This hypothetical example illustrates a potential application of RPU during financial transitions. Your policy’s performance and loan options will depend on your specific circumstances and insurer.
Market Volatility Scenario: “Michael’s Approach”
Situation: In this scenario, Michael, age 58, has a $600,000 whole life policy with $220,000 cash value and is nearing retirement when a market crash occurs. His investment portfolio loses over 30% of its value.
Strategy: Rather than selling depreciated stocks to generate income, Michael elects RPU on his policy, converting to a $325,000 death benefit with no further premiums. He then takes a $50,000 policy loan at 5% interest to provide income while his investments recover.
Potential Outcome: This approach could allow investments time to recover, potentially preventing significant permanent losses. The policy continues earning dividends, and a repayment plan could be established once the portfolio recovers.
Note: This example represents a theoretical application of RPU during market downturns. Actual policy performance, loan rates, and investment recovery will vary based on numerous factors specific to your situation.
Frequently Asked Questions
What is the minimum cash value needed to elect reduced paid-up insurance?
The minimum cash value required varies by insurer and policy, but generally, your policy must have been in force for at least 3 years and have accumulated enough cash value to purchase a meaningful amount of paid-up insurance. Some companies require a minimum of $5,000-$10,000 in cash value, while others calculate based on a percentage of the current death benefit.
Can I increase my death benefit after electing RPU?
Once you’ve elected the reduced paid-up option, you cannot directly increase your death benefit through additional premium payments. However, if your policy continues to receive dividends and you direct them to purchase paid-up additions, your death benefit can gradually increase over time. Some policies may also offer the option to apply for additional coverage through a new policy.
How does RPU affect my policy’s cash value growth rate?
After electing RPU, your policy’s guaranteed cash value growth rate typically remains the same. However, the total growth may be slower since the policy’s death benefit is reduced, which can result in smaller dividend payments. The cash value continues to grow tax-deferred, but the growth curve may flatten compared to a fully premium-paying policy.
Will my beneficiaries know that I elected RPU?
Your beneficiaries will not automatically know that you elected the reduced paid-up option unless you inform them. When they receive the death benefit, they will simply receive the current face amount of the policy. It’s advisable to communicate any significant policy changes to your beneficiaries or the executor of your estate to ensure they understand the coverage amount to expect.
Can I convert just a portion of my policy to RPU?
Most insurance companies do not allow partial RPU elections – the entire policy must be converted. If you wish to maintain some premium-paying coverage while reducing your premium obligation, consider alternative approaches such as partial surrenders, policy splits (if available), or reducing the face amount while keeping the policy active.
How quickly can I access my cash value after electing RPU?
Access to cash value through policy loans or partial surrenders typically remains the same after electing RPU – usually within 7-10 business days upon request. There is no additional waiting period beyond what would apply to a standard policy. However, your maximum loan amount will be based on the new, reduced cash value.
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8 comments
Fabrice Dejean
To surrender means to cancel your coverage. Cancelling coverage is available for term life insurance, in the sense you can eliminate the cost by paying the rest of the policy premiums with the premiums you’ve already paid, which will have reduced the cash value down to 0 whenever the policy is finally paid-up. This is called a reduced paid-up policy and it is only available for term life insured who have paid 50 percents of the total amount of premiums on their policy. Term life insurance does not have a death benefit, it has a cash value which is equal to the amount of premiums paid including the accrued interest payable whenever the coverage ends or at death. If you have repaid 80 percent at your death, your beneficiary will receive the accumulated interest – the remaining 20 percent owed. On the other end, surrendering a whole life insurance policy is not available and there is no reduced-paid up option. With whole life insurance, you must commit to make the premiums to keep your coverage active. If you missed payment, your policy will be terminated after a grace period of 30 days. The reason for having a whole life insurance is the guaranteed death benefit, which will be paid in cash, in the form of a lump-sum check or annuity payments from the insurance company indeed.
Insurance&Estates
Thank you for your comment, but I believe there might be some confusion about how different types of life insurance work. Let me clarify a few points:
1. Term life insurance has no cash value component. It provides only a death benefit for a specific period (the “term”), with no accumulation of cash value. If you stop paying premiums, the policy typically lapses without any return of premiums.
2. Whole life insurance does build cash value, and contrary to your comment, surrender options are available. You can surrender a whole life policy and receive the accumulated cash value (minus any surrender charges if any apply). The whole life insurance we recommend does not have surrender charges.
3. The “reduced paid-up” option is actually available for whole life insurance, not term. This option allows you to use the existing cash value to purchase a smaller, fully paid-up policy with no further premiums required.
4. Whole life insurance policies typically have non-forfeiture options that prevent automatic termination after missing payments. The cash value can often be used to keep the policy in force temporarily.
5. Both term and whole life provide a death benefit. The key difference is that term provides temporary coverage with no cash value, while whole life provides permanent coverage with a cash value component.
I hope this helps clarify these concepts. If you have any specific questions about how these policies work, I’d be happy to provide more information.
Ruth Irene Lowry
I have a 150k whole life policy from NML. It has approx $25k cash value, $50k loan @8% and $35k basis. Divs pay premiums. I’m 69 now and no longer need the death benefit. I don’t want to pay the loan, which is accruing interest quickly. It was recommended that I convert the policy to RPU, applying the entire basis to the loan. I will still recognize $15k “phantom” income this year, however. I will also have a policy with $25k cash value and no basis, which seems a lot like an IRA to me. I plan to offset some of this year’s income with charitable gifts. In each of the next 2 years I would withdraw half of the cash value and pay it to charities. In this way I have divided the $40k income recognition “hit” over 3 years. I can time the charitable deductions to my best advantage. Does this sound like a plan?
It would be even better if I could transfer the cash directly to charity so that it is not included in AGI, as one can do with an IRA over 70. There’s no way to do that, is there?
Apologies for the long question. And thanks.
Insurance&Estates
Hello Ruth, thanks for connecting. I suggest you connect with our high cash value life expert Barry Brooksby to get your questions answered. You can request a call by emailing him at barry@insuranceandestates.com.
Best, Steve Gibbs for I&E
Lydia Perez
We ( couple ) have a second to die life insurance. We had paid for 22 years . We are retired now and considering Reduced paid up option. It is for $ 500, 000 with term of $ 250,000.. The guaranteed cash value per the inforce ledger is $ 265475. . Is it good financial planning taking that option?
Will appreciate to hear from you. Insurance is from Northwestern.
.
Insurance&Estates
Hi Lydia, thanks for reading. I suggest you direct your question by e-mail to Jason Herring at jason@insuranceandestates.com as he is very familiar with this kind of planning question.
Best, Steve Gibbs for I&E
SANTO BISIGNANO
Can a reduced paid up election be made if there is a policy loan?
Insurance&Estates
Hello and thanks for commenting.
If I understand your question, yes, paid up “additions” are still available if there are unpaid policy loans.
If you have other questions, I suggest connecting with our IBC expert Barry@insuranceandestates.com.
Best, Steve Gibbs, for I&E