Posted by: Labdhi Mehta on Dec 11, 2017, 12.28 PM IST
1. A paid-up policy is one that requires no further premium payments and continues to provide benefits till maturity.
2. A policy can be converted to a paid-up policy once it acquires a surrender value which is typically after 2-3 annual premiums are paid for traditional plans. For Ulips, there is a lock-in period of 5 years.
3. Paid-up value is usually calculated as number of paid premiums X sum assured /total number of premiums.
4. In case of a paid-up Ulip, the policy administration charges, mortality and fund management charges continue to be applicable and negatively impact the fund value.
5. This is a useful option when one is stuck with an inappropriate product due to wrong selection and can be opted for instead of surrendering the policy to avail of a life cover.