Non-contractual conversion of a policy to paid-up
Variation of a policy to convert it to paid-up
IPTM8210 describes what is meant by converting a policy to paid-up. If the terms of a qualifying policy do not provide for a policy to be converted to paid-up but the policy is converted to paid-up by agreement between the policyholder and the insurer then that would be a significant variation. The policy would need to be re-tested to see whether it remains qualifying. As with variations of a policy generally, an immediate chargeable event cannot arise on making the policy paid-up.
The policy would remain qualifying unless it was made paid-up within ten years of its being made or within ten years of the most recent previous significant variation of the policy.