Reduced Paid-Up (RPU) Insurance

Reduced Paid-Up (RPU) insurance is an option available in some whole life insurance policies that allows a policyholder to cease paying premiums while still maintaining a portion of the coverage for life. This non-forfeiture option can be exercised if the policyholder decides they no longer wish to, or are unable to continue paying the policy's premiums.

Instead of surrendering the policy for its cash value or allowing it to lapse, the policyholder can opt for RPU insurance, where the policy's cash value is used to purchase a smaller amount of paid-up whole life insurance.

The amount of the reduced paid-up coverage is determined by the policy's existing cash value and the insured's age at the time of conversion..