The Enhanced Paid-Up Additions Rider

The Enhanced Paid-Up Additions Rider is an excellent tool that gives you great flexibility over your whole life policy. When you sign up for a whole life policy, your policy provides determines your premiums through underwriting. You can pay premiums monthly, quarterly, biannually or annually. You are obligated to pay the premiums on time and according to schedule only. If you want to fund your policy outside of the contractual schedule, then the only workaround would be to setup an annuity. This will allow you to put some money aside in advance and not worry about making the scheduled payments on time. But what about the other opposite scenario? Such as the current pandemic, or if you operate your own business and do not have steady income stream. Well, here comes the Enhanced Paid-Up Additions Rider.

Basic Properties and Benefits

The The Enhanced Paid-Up Additions Rider (PUAR) is designed for whole life policies only. It gives you additional death benefit and enhances tax deferred cash value growth. You can utilize it to generate higher policy dividends, increase your death benefit and even cut down your premium paying period. This premium flexibility has rules, meaning you can’t pay 0% one year and 200% the next year, but allowing you to pay 25% less or more is pretty generous. If you drop below the 75% scheduled premium, then the PUAR extends you a two year catch up period.

This rider is especially beneficial if your’re anticipating extra income such as a maturing certificate of deposit, sale of real estate, annual bonus and so on. This rider can also be used to accept 1035 exchange proceeds. If such additional payments are accepted in year one, then you must disclose them prior to policy issue. In ensuing years, i.e. two and onward, are subject to the 75% and 125% limits. The extra payments are used to build cash value, death benefit and of course loan amount availability.

The Enhanced Paid-Up Additions Rider Features

  • This rider can be issued anywhere between from the age 0 to 84.
  • Of course you can use it with both genders, male and female.
  • It is issued to you subject to your insurability.
  • Any extra first-year premiums must be underwritten prior to issue
  • Minimum annual premium is $180.
  • Maximum annual premium is subject to issuer approval.
  • Premium modes are Annual, Semiannual, Quarterly, Electronic Fund Transfer (EFT) Month.
  • It can be applied to a single premium policy or any number of payable years as per underwriting.
  • Catch-up window if premium below 75% is two years.
  • Dividends option follows the one selected in the base policy. Money paid into a policy through this rider collects dividends along with the whole life policy.

Ready to get started?

If this rider is something you think can bring you a benefit, then let’s get together and discuss your personal situation. You can start by filling out this form here. Or just send us an email and let’s set up a time and get together to have a confidential discussion.

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