What are Paid-Up Addition Riders? - Insurance Rider Series 8
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 concept, cash flow banking, or the bank on yourself.
It also works well for the immediate financing arrangement 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.
Series
What are Insurance Riders? - Insurance Rider Series Part 1
What is a Term Rider? - Insurance Rider Series 2
What is a Critical Illness Rider? - Insurance Rider Series 3
What is a Guaranteed Insurability Rider? - Insurance Rider Series 4
What is a Disability Waiver of Premium Rider? - Insurance Rider Series 5
What are Child and Spousal Riders? - Insurance Rider Series 6
What is a Return of Premiums Rider? - Insurance Rider Series 7
What are Paid-Up Addition Riders? - Insurance Rider Series 8
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