Warning
Info
Warning
Info
Simple English definitions for legal terms
paid-up policy
Read a random definition: International Court of Justice
A quick definition of paid-up policy:
A paid-up policy is a type of insurance policy that remains in effect even after all the premiums have been paid. This means that the policyholder no longer needs to make any more payments to keep the policy active. It is a way to ensure that the policyholder continues to have coverage without having to worry about making regular payments.A more thorough explanation:
Definition: A paid-up policy is a type of insurance policy that remains in effect even after all premiums have been paid. It is a contract between the insurer and the policyholder that provides coverage for a specific period of time or for the policyholder's lifetime.
Example: A person purchases a life insurance policy that requires them to pay premiums for 20 years. After 20 years, the person has paid all the required premiums, and the policy becomes a paid-up policy. The policy remains in effect, and the person is still covered by the insurance even though they are no longer paying premiums.
This example illustrates how a paid-up policy works. Once all the required premiums have been paid, the policy remains in effect, and the policyholder continues to be covered by the insurance.