What is the reduced paid-up value option in my cash-value life insurance policy?
If you have a cash-value life insurance policy but don’t want to make premium payments anymore, you can use the cash value of your insurance to purchase a fully paid policy by exercising your policy’s reduced paid-up value rights. Say your current policy would pay a $100,000 benefit upon your death. Rather than continuing to pay annual premiums, you could use the policy’s current cash value to purchase a fully paid policy that provides less coverage. The new policy might only pay $50,000 upon your death, but you would never have to make another premium payment.
