Paid-Up Additions (PUA)

A paid-up addition is a miniature Whole Life Insurance policy purchased outright with a single payment — no future premiums ever due on it. Each PUA immediately adds Cash Value (typically 90%+ of the payment converts to equity right away) and permanently increases the Death Benefit. PUAs are themselves participating: they earn dividends, which can buy more PUAs — compounding stacked on compounding.

The PUA rider is the single most important design element in a policy built for Infinite Banking. Base whole life premium buys guarantees efficiently but builds early cash value slowly; PUA dollars build cash value almost one-for-one. Shifting the premium mix — say, 30% base / 70% PUA instead of 100% base — is what turns a policy with usable capital in year eight into one with usable capital in year one. Same insurer, same contract family, completely different machine.

A concrete sketch: $20,000/year into a traditionally designed policy might show $6,000–9,000 of first-year cash value. The same $20,000 into a max-PUA design commonly shows $13,000–17,000 — and the gap in usable capital persists through the crucial first decade when the banking function matters most.

PUA riders come with rules worth knowing: minimums and maximums relative to base premium, "use it or reduce it" provisions on some contracts if you skip PUA payments repeatedly, and flexibility differences between carriers (a major reason company selection matters — see Participating Policy). Each PUA payment also nudges the policy toward the IRS funding limit, so designs run just beneath the Modified Endowment Contract (MEC) line, with the insurer testing every payment.

Two everyday uses: dump windfalls (bonuses, tax refunds, business distributions) into the PUA rider to accelerate the system, and direct dividends to PUAs by default so the policy feeds itself.