A Reduced paid up whole life insurance is a policy for which the policy owner no longer wanted to pay premiums, but did not want to lose the death benefit provided by the life insurance plan.
Instead of surrendering the life insurance policy, or taking the cash value, the policy owner can choose to turn the whole life policy into a reduced paid up whole life insurance policy.
This will create a lower death benefit than the original face amount of coverage provided by the policy when originally purchased, but requires no more premium payments be made, and will pay out the stated, reduced death benefit when the insured person dies.
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