What is the implication of the coverage change when Reduced Paid Up Insurance is selected?

When Reduced Paid Up Insurance is selected, the implication is that the policy remains a permanent life insurance policy, but the coverage amount is reduced. This option allows the policyholder to stop paying premiums but still keep a form of coverage in place. The reduced coverage is typically calculated based on the policyholder's accumulated cash value and the face amount of the original policy. As a result, while the death benefit is lower, the policyholder retains benefits that a permanent policy provides, such as the potential for the cash value to grow over time.

This option aligns with the fundamental purpose of Reduced Paid Up Insurance, which is to provide a way for insured individuals to maintain some level of life insurance protection without ongoing premium payments, rather than shifting to temporary or other types of coverage.