How Does Paid Up Life Insurance Work? 
When a life insurance policy is paid up it simply means that no more premiums are due to maintain the death benefit . It is like paying off your car . Mutual companies who pay dividends allow you to take your dividends in the form of paid up insurance . This allows you to increase your death benefit . With whole life policies you can also take a reduced paid up policy which allows you to stop making premium payments in exchange for a lesser face amount that would be considered paid up . 