How to Calculate Paid-up Life Insurance Amounts

Paid-up life insurance provides additional life insurance death benefit that doesn't require ongoing premium payments. This additional insurance substantially adds to your original death benefit amount over time, and it is normally associated with whole life insurance that pays dividends. Such policies are sometimes referred to as "participating whole life" or "dividend-paying whole life" insurance. When you die, your beneficiaries receive both the original insurance amount and the paid-up life insurance amount you've accumulated.

Obtain a copy of your most recent life insurance policy statement from your insurance company or request an in-force policy illustration. The most current statement shows your current dividends and death benefit amount, as well as other important information. The in-force illustration shows the same information.

Look on your statement or policy illustration for the dividend amount. You statement lists "current dividend" and "total accumulated dividends," as well as "total paid up life insurance." Your policy illustration contains several columns. One of them shows you total paid-up life insurance death benefit. This is normally listed in its own column under a "non-guaranteed" or "assumed" ledger in the illustration.

Find the current year on your policy illustration and note the total paid-up life insurance amount. This is the amount of money you will receive in addition to the original death benefit you purchased, which is listed as "base amount" or "guaranteed death benefit" on the policy illustration and current policy statement.