What are Paid-Up Addition Riders?
It is the eighth and final week of our series of posts focused on insurance riders.
We have covered a lot of insurance riders, we recommend you at least read the first about insurance riders in general before going through the rest of them.
This post is dedicated to paid-up addition riders, what they are, who they are for, and some of the benefits it provides. This is an important rider that goes on to permanent life insurance policies, usually whole life insurance.
What is a paid-up addition rider?
What it does is as your permanent life insurance policy or your whole life policy grows with the dividend.
One of the options that you can use for that dividend is to buy more permanent insurance which is called a paid-up addition.
What that does is, as you are receiving dividends from the policy, it is buying more insurance so your insurance amount is growing.
The reason that we do this is because we often do insurance policies that have really high cash values and this is a way to get those cash values to keep growing.
It is an important and integral part of strategies like the Infinite banking, cash flow banking, or the bank on yourself.
It also works well for the immediate financing arrange literally IFA strategy that we have discussed in previous posts and plans that we have implemented.
Another great benefit for it is that for example: you're setting up your permanent policy now and your budget is whatever it is currently and it is still growing.
So this is a way to start with a certain amount of insurance and have it grow overtime and have your insurance grow for the rest of your life.
Contact Us
At Safe Pacific Financial, we specialize in helping Canadian business owners, incorporated professionals, and investors structure life insurance for maximum wealth protection, tax savings, and business growth.
If you would like to discuss whole life insurance or investments, we’re happy to chat and see if we can be a good fit to work with you. Fill out our contact form and we will get back to you within 24 hours on business days.
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