When exactly does a life insurance policy acquire a paid-up value?
How is the value determined? If premiums are paid for three years for a policy, but not subsequently, the policy is said to have acquired a paid-up value, although literally speaking, it is a lapsed policy. The paid-up value is calculated by multiplying the sum assured by the ratio of number of premiums paid under the policy and the number of premiums payable. Most policies stipulate that if the value thus calculated is lower than Rs 250, the policy is not said to have acquired a paid-up value. Once a policy acquires a paid-up value, it is disqualified from participation in future bonuses.
