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 policiesafter the regulatory and development authority irda changed the guidelines last september to make ulips longterm products the minimum lockin period has gone up to five years from three yearssome ulips often termed limited pay ulips now offer a limited premiumpayment period of around 57 years there are also endowment plans that offer similar optionsthe 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 premiumpaying horizon of the policyholderulips with limited pay optionpolicies with limited premiumpaying terms work along the lines of singlepremium insurance plans the premium to be paid over a period of say 15 years is compressed into 57 years in the case of limited pay ulips says rahul aggarwal ceo optima insurance brokers some companies offer products that come only with limited pay options it is done to eliminate confusion and help distributors meet the needs of insuranceseekers whose profile suits such productsbut if you choose a limited pay option the premiums will be higher than the regular pay version of the policiesnavguaranteed ulipsa heavily promoted ulip category navguaranteed policies typically specify a limited premiumpaying period and promise policyholders the highest nav net asset value clocked by their funds over a period of say seven years the guarantee could also be in the form of a prespecified nav assuranceall guaranteed ulips come with the caveat that the insured stays invested until maturity the premiumpaying period is shorter as the company would want to narrow the range for calculating the highest nav says aggarwalendowment planslike ulips endowment plans too offer the limited pay options most companies offer plans where the insuranceseeker can choose a premiumpaying term ranging from five years to 25 yearsgauging suitabilitypremiums as mentioned earlier would be considerably higher when compared with regular premium pay plans therefore the first factor that you need to consider is affordabilitythe premium is not exactly equal to the regular premium that would be paid through the policy tenure in the case of a limited premium ulip the premium will be a little more than for a regular premium plan this is to ensure that the corpus available in the fund is higher says nandagopal of indiafirst life after the premium payment is stopped premium allocation charges will go out of the picture but the administration and mortality charges will continue to be deducted from the fundthe fund will continue participating in the market and will benefit from the remaining amount invested hence the