Proportionately reduced sum assured when policyholder discontinues premium payments.
Paid-Up Value is the reduced Sum Assured that a traditional endowment or savings life insurance policy acquires if the policyholder stops paying future premiums after completing a minimum period (usually 3 consecutive policy years). The policy continues with reduced life cover until maturity.
Formula: Paid-Up Sum Assured = (Number of Premiums Paid / Total Number of Payable Premiums) × Original Sum Assured.
Surrendering a policy terminates it immediately for cash. Paid-up status allows the policy to continue with reduced cover until maturity.
Many policyholders misunderstand this clause until a claim actually occurs. Always verify the exact definitions in your policy wording schedule rather than relying on verbal marketing summaries. Disclose all material facts truthfully at the time of proposal to help ensure smooth claim assessment without non-disclosure issues.
Pure term insurance has zero paid-up value because it contains no investment component.
If unable to pay endowment premiums, explore converting to paid-up rather than surrendering at a heavy loss.
Explore policy features, benefits, terms, and parameters for this insurance category.
Speak with a Qualified Insurance Sales Person (ISP) at RakshaPoint IMF for parameter-based guidance.
Transparent parameter-based policy guidance from qualified Insurance Sales Persons (ISPs) under IRDAI IMF regulations.