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The definitions contained herein are for general information only and are not designed for use in connection with the interpretation of any insurance policy or annuity policy issued through Insurance Answer Center.
Life Insurance Glossary Terms  4 A B C D E F G H I J K L M N O P Q R S T U V W Y

Reduced Paid-Up Insurance

This is one of the life insurance non-forfeiture options available in most whole life and interest-sensitive whole life policies. It allows the policyowner to stop paying premiums and use the cash value of the contract to purchase a lesser amount of death benefit coverage. The cash surrender value (cash value less any outstanding policy loans) of the policy is used as a single premium to purchase whole life insurance for the amount the cash surrender value will purchase. No additional premiums will usually need to be paid See also Extended Term Insurance Option.

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