IIAP Ordinary Life (OL) Practice Exam 2026 - Free Ordinary Life Exam Practice Questions and Study Guide

When the policyowner elects the paid-up insurance option, premiums cease, and protection continues for a reduced amount. This option allows the policyowner to stop paying premiums while still maintaining a level of life insurance coverage. The policy's cash value is used to purchase a paid-up policy that provides coverage for a reduced face value equivalent to the amount of accumulated cash value at the time of the election. This means that the policy remains in force without the need for ongoing payments, although the coverage amount is now lower than the original face value of the policy.

Paid-up insurance provides a way for policyowners to retain some level of insurance protection when they can no longer afford premium payments, offering a flexible solution to their changing financial situations.