Paid-Up Additional Insurance (PUA) is an option in whole life insurance policies that allows you to purchase extra coverage without having to pay ongoing premiums. Once purchased, this additional insurance is fully paid for and starts providing a death benefit immediately. PUAs also add to your Whole Life policy’s cash value, which steepens the guaranteed growth curve as well as entitles the policyholder to bigger cuts of future dividend pools.
Paid-Up Additions should be your default dividend option during the accumulation phase of your life, since it exponentially increases both your cash value and death benefit. Most mutual companies also offer some kind of Paid-Up Additions rider where you can schedule overfunding payments or even make unscheduled PUA payments when a flexible PUA rider is available.
Check out our deep-dive article on PUAs.