Paid Up Additions: What are they?
A big piece of the engineering of your policy is a rider called “Paid Up Additions,” or PUA. When we engineer your policy, this option, or rider, that we select is part of the “secret sauce” to making your banking policy work for you.
Paid Up Additions purchase 2 things for you:
- Additional death benefit, and
- Additional cash value.
Your banking policy has a face amount, or death benefit, at the outset. Additional funds (or PUA) going in make that number go up. And that’s great for your beneficiaries.
There is also cash value in your policy, and this is what we teach to take loans from.
Paid up additions buys more cash value for you to use. There’s also a reason why it’s called “Paid Up.” There’s no wait. It’s there immediately, just like the additional death benefit it buys.
So if you ever hear us using the term “overfunding,” we’re talking about more Paid Up Additions going into your banking policy.
When your dividends are declared, the automatic election is for pouring more PUA into your banking policy as well. Some companies have a PUA minimum amount they require to go into your deposits each year to keep that option open. If that amount is not paid, then the ability to continue to overfund your policy in the future will lapse.
There is PUA included into your premium deposits from the beginning.
Do all you can to keep it in there in the early years. If you’re using this policy for cash like we teach, limiting your PUA, or in other words, not paying your full premium deposit we’ve set up, will limit how much money you can contribute in later years and how much cash is available for you to use now.
When you’re ready to get started on creating your financial legacy or if you have more questions, most questions can be answered by watching this video. Start there and then schedule a consult with my team when you’re ready to begin.