A whole life insurance contract can offer you lifelong protection with death benefits for your family, and it can also help you
To get even more out of your contract, you don't necessarily have to pay more. You may be able to increase your death benefit and cash value with paid-up additions. Let's explore how this option works.
Paid-up additions & dividends: How do they work?
Paid-up additions are increases in your coverage you can fund with dividends from your insurer. When you have a
You can then reinvest these paid-up additions back into your policy. The benefit of doing so is that without paying additional premiums, you can:
- Increase your death benefit
- Further grow your tax-deferred cash value
Paid-up additions function like small single-premium life insurance policies. Purchasing additional paid-up insurance can increase your future dividends since you have a larger contract.

Ways to use whole life insurance dividends
Should you use your dividends to purchase paid-up additions?
Using your dividends to get more paid-up additions could pay off significantly in the long-run. They can help you maintain sufficient coverage and help prevent inflation from detracting from your loved ones' benefits. This may make sense for you if:
- You want to increase your death benefit without undergoing any additional underwriting, like medical exams.
- You want to make an additional investment into your cash value to use later in life.1
Still, not everyone needs or wants paid-up additions—they aren't critical to making a whole life insurance contract work to your benefit. An important consideration is that the benefits of paid-up additions can vary widely by provider. Yours may not offer even offer dividends, for instance. The number and frequency of paid-up additions you can buy may make a difference, too.
Making paid-up additions work best for you
If you're unsure whether paid-up additions make sense for you, a