What does it mean when a policy is ‘fully paid up?’

A fully paid-up car insurance policy means you won't have to make monthly payments. Life insurance policies that are fully paid up are part of whole life insurance policies with paid-up addition riders. You can receive an auto insurance discount with fully paid-up insurance.

Free Car Insurance Comparison

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

Free Car Insurance Comparison

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

UPDATED: Jun 28, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance company and cannot guarantee quotes from any single insurance company.

Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

Written By: Chris TepedinoReviewed By: Laura WalkerUPDATED: Jun 28, 2022Fact Checked

The Rundown

  • A fully paid-up insurance policy doesn’t require additional payments
  • A discount is available when you pay an insurance policy in full
  • Paid-up addition is a term used in life insurance policies

A fully paid-up car insurance policy can stop monthly payments in its tracks, but do you know that there are paid-up options in regard to life insurance?

And how does fully paid-up insurance work? Don’t worry – we’ll show you how paid-up insurance works concerning car insurance and life insurance.

Our guide explains everything you need to know about how you can save money with fully paid-up auto insurance. Also, we’ll show you what paid-up additions are in life insurance.

Read on to learn more about fully paid-up car insurance. If you’re ready to start comparing multiple insurance companies, enter your ZIP code in the free online tool above.

What does it mean when a policy is ‘fully paid up?’

A fully paid-up policy results when you pay the car insurance bill in full. In other words, if your annual auto insurance bill is $1,500 and you pay the total amount, you won’t have any more payments.

All drivers have an opportunity to pay a policy in full when the car insurance company requests a deposit. If you decide to pay in full, you’ll receive a discount.

Compare The Best Insurance Quotes In The Country

Compare quotes from the top insurance companies and save!

secured lock Secured with SHA-256 Encryption

Do I have to pay my car insurance policy in full?

No, you don’t. But you usually have to make a deposit. Fully paid-up car insurance rates are approximately 10% less expensive.

When you make a deposit, you’ll miss the pay-in-full discount. However, deposits reduce your monthly rates.

Let’s examine how making a deposit to the average auto insurance rate affects monthly and annual rates.

  • Rates with no down payment – $268/month or $3,216/year
  • 10% down payment – $241/month or $2,894/year
  • 20% down payment – $214/month or $2,572/year
  • 30% down payment – $188/month or $2,251/year
  • 40% down payment – $160/month or $1,930/year

The more you deposit on your car insurance bill, the less you’ll pay for the policy’s term.

How do I get affordable fully paid-up car insurance quotes?

You can purchase fully paid-up car insurance after you undergo an insurance company’s quote process.

Several factors determine whether affordable paid-up auto insurance is available to you. The best factors for affordable fully paid-up car insurance rates include a good driving record, excellent credit, a medium coverage level, low annual mileage, and a high deductible.

What happens to car insurance after you pay off a loan?

Nothing actually happens to your auto insurance after paying off your car loan. But you have an option to either keep full coverage insurance or downgrade to liability-only insurance.

However, we strongly recommend that you keep full coverage car insurance. Repairs for new vehicles cost less than what the car is worth. And vehicles worth less than total loss accident repairs don’t need full coverage, but full coverage insurance can help replace a car that isn’t worth much.

Therefore, you should keep extra auto insurance coverage even if it’s not required.

How does ‘paid up’ relate to life insurance?

Paid-up insurance, in regard to life insurance, is a policy that’s paid in full. In other words, you won’t have any monthly fees after paying your annual rate for the year.

However, paid-up insurance options are merely for specific life insurance policies, such as whole life insurance. A whole life insurance policy provides coverage for your entire life.

If you want to pay for your whole life insurance a year in advance, you have an option to do that.

What are paid-up additions?

Paid-up addition (or PUA) is a life insurance rider that provides you with an option to convert your cash value into another life insurance policy.

The paid-up additional insurance won’t have any monthly payments but generates a lower death benefit. Also, you won’t have to take another medical exam.

Some life insurance companies use annual dividends to buy smaller policies. And each insurance policy has a cash value with the potential to grow.

Paid-up addition insurance is usually sold at mutual insurance companies that sell permanent life insurance.

Compare The Best Insurance Quotes In The Country

Compare quotes from the top insurance companies and save!

secured lock Secured with SHA-256 Encryption

Fully Paid-Up Insurance: The Bottom Line

Paid-up insurance has various definitions depending on the insurance type. While fully paid-up insurance options mean no more payments in specific situations, they have different effects in several industries.

The advantage of paid-up insurance is that you won’t have any additional payments, and you can receive a discount in some cases. But your savings is determined by the specific factors and the company that has your policy.

Before you decide to purchase fully paid-up car insurance or life insurance, use our free online quote tool below to compare multiple insurance companies near you.

Frequently Asked Questions: Fully Paid-Up Car Insurance

Do you want to know more about being fully paid up? Read these answers to frequently asked questions to learn more.

#1 – What is fully paid up?

The term “paid-up” is used in several industries, but it means a product or service has been paid in full. And it requires no additional payments from you.

#2 – Can I pay a home insurance policy in full?

Yes, you can. Your homeowners insurance can be paid in full.

#3 – Does term life insurance have paid-up riders?

No, it doesn’t. It’s only available for specific permanent life insurance policies.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.

Chris Tepedino is a feature writer that has written extensively about home, life, and car insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and C...

Full Bio →

Written by Chris Tepedino
Insurance Feature Writer Chris Tepedino

Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

Full Bio →

Reviewed by Laura Walker
Former Licensed Agent Laura Walker

Free Insurance Comparison

Compare quotes from the top insurance companies and save!

secured lock Secured with SHA-256 Encryption