What is Paid-Up Additions (PUA)?
Paid-Up Additions (PUA) refer to an option available in some Whole Life Insurance policies, allowing policyholders to purchase additional coverage using policy dividends or separate payments. These additions are fully paid up, meaning they do not require future premiums, yet they contribute to both the cash value and the death benefit of the policy.
With PUAs, policyholders can enhance their policy’s value by using dividends generated by the policy or by making extra payments. The cash value of PUAs grows at the same guaranteed interest rate as the main policy and may also earn dividends, further accelerating the policy’s value growth. This makes PUAs a popular choice for individuals looking to increase their policy’s financial benefits without committing to higher ongoing premiums.
For example, if a policyholder has accumulated dividends from their whole life policy, they can use those dividends to buy Paid-Up Additions. These additions increase the policy’s cash value and the overall death benefit, enhancing the policy’s financial strength over time.
Paid-Up Additions are beneficial for those who want to boost their life insurance benefits and cash value, offering a way to accelerate policy growth, gain greater financial flexibility, and increase the death benefit for beneficiaries.