InsuranceFinancial Glossary
Paid-Up Value
Definition
The reduced value of a life insurance policy when you stop paying premiums but do not surrender the policy. The insurer calculates the paid-up value based on the number of premiums already paid relative to the total premium-paying term. A policy with paid-up value continues to provide reduced coverage until maturity.
Why It Matters
If you cannot afford to continue a traditional life insurance policy, converting to paid-up status is often better than surrendering (which involves losing surrender charges). The paid-up policy continues to earn bonuses and provides some death benefit, preserving partial value of your investment.