Paid-up and Extension Benefits Under the Limited-
Payment Plan. As was explained in the previous chapter
various contingencies may arise which may cause the insured
to view a policy differently from the way he did when he pur-
chased it and which may induce him either to surrender it
or to discontinue the payment of premiums. This attitude
may be caused by any one of several events, such as loss of
earning capacity, death of one's dependents, or impairment
of health to such an extent as to make death certain during
the period for which extended insurance is granted. Under
such circumstances the insured may realize the guaranteed
values of his contract as they stand at the time. Either he
may surrender the policy for its cash value or effect a loan
against that value, and this cash or loan value we have seen
is considerably larger under the limited-payment than under
the continuous-payment plan. Or the insured may exercise
the option of taking paid-up or extended insurance, and these
benefits, since the larger cash value is used as a single
premium to purchase paid-up or extended insurance at the
then attained age, will be greater than under the ordinary
life policy.
Related posts:
Advantages of the Limited-Payment Plan
