The thought of paying premiums for a limited period, but enjoying the insurance cover for a long period is very appealing. Perhaps, that is why companies sell policies, especially unit linked insurance plans, or Ulips, where the premium paying term is shorter for coverages that are comparable with regular policies.

After the Regulatory and Development Authority (IRDA) changed the guidelines last September to make Ulips long-term products, the minimum lock-in period has gone up to five years from three years.

Some Ulips - often termed limited pay Ulips - now offer a limited premium-payment period of around 5-7 years. There are also endowment plans that offer similar options.

"The core benefit of a limited pay plan is the possibility of enjoying coverage and remaining invested for a longer period even if the payment commitment is for a shorter period," explains P Nandagopal, CEO, IndiaFirst Life Insurance. "Insurance companies also have the higher possibility of enjoying greater persistency if the product is suitable to the premium-paying horizon of the policyholder."

To understand the nuances of different types of policies and its price, feel free to seek the help of InsuranceMall to select the right products based on your need. Or you can directly call them on +91-22-30503050

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