Claim Settlement Ratio of 99.23%~

How Life Insurance Goes Beyond Income Replacement

Most of us buy life insurance to financially protect our family in the event of loss of income of the earning member, and to fulfil our family's life goals. Generally, the investments made for achieving these life goals are long-term in nature, making them susceptible to the uncertainties of life. Such unexpected exigencies can endanger one's earnings, and put future plans and economic stability of one’s family at stake. While Life insurance can help protect the uncertainties in life, having a protection for investments is equally critical to ensure your family's life goals are met.

Investment plans also act as tax-planning tools, as many avenues help reduce tax liability. There are different types of investment plans, and by choosing the right one, you can invest according to your needs and grow your savings.Read Less

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Written ByPalak Bagadia
AboutPalak Bagadia
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Palak Bagadia, Associate – Digital Marketing at Bajaj Allianz Life, with experience spanning content and performance marketing, recruitment, employee engagement in the BFSI industry.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 7th July 2024
Modified on: 7th July 2024
Reading Time: 15 Mins

In case one is the sole provider for their family, it is important to ensure that if something unforeseen happens, the surviving family members will have money for bills and expenses. So, the focus must rest on guaranteeing the continuance of existing investments to make sure that one's long-term financial goals can be accomplished regardless of the loss of a regular monthly income. And in order to do that, one must ensure that their life insurance cover is plenty to meet most of the liabilities and the future needs of their family. Hence, Life insurance can go beyond just "income replacement".

Protection and investment plans must go hand-in-hand in safeguarding the financial stability of families and ensure continuity of their life goals. For example, a life cover equivalent to the amount of an education loan can ensure that the children do not lose out on the future prospects, even if the payee is no longer alive to repay the loan.

Since life insurance protects the financial security and the definite investment aspirations of a family, it becomes important to define the portion of the investments that need protection and the ones that don't. It can be segmented, between long-term - investments those that are for five years and above, and short-term - investments that are for a limited period of one to three years. With the uncertainty of life looming at large, this simple division can help one manage the life cover one may need. There are two kinds of covers available - pure protection life insurance plans which help to mitigate the risk on future incomes in case of early death, and traditional life insurance plans which offer a long-term guaranteed return to people. These fixed returns can be used to counterbalance the brunt of sporadic interest rates and unstable share markets on investment returns, thus providing equanimity to one's financial goals.

So, it is wise to insure the investments towards one's long-term life goals usually when the investment plan is of five years and above. This is the best way to ensure that one's loved ones continue to meet their life goals no matter what.

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IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER. Investment in ULIPs is subject to risks associated with the capital markets. The policy holder is solely responsible for his/her decisions while investing in ULIPs.

The above information is for general understanding and is meant to educate the general public at large. The reader will have to verify the facts, law and content with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information.

The views stated in this article is not to be construed as investment advice and readers are suggested to seek independent financial advice before making any investment decisions. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on carefully before concluding a sale.


*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

~Individual Death Claim Settlement Ratio for FY 2023-2024

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%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

@Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws
Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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