Close Button Close Button
X
NRI Services Helpline

Calling FromPhone Number
Calling us from INDIA18002097272 (Toll Free)
Rest of the World+912067871700
(Call charges apply)

  • Home >
  • Blogs >
  • Term >
  • Why Term Insurance Is Essential For Financial Security

Top Reasons Why Term Insurance is Essential for Financial Security

Everyone wants their family to be safe and happy—even when they are not around. In such situations, a term insurance can help. A term plan gives your family a pre-determined sum assured incase of your untimely death during the policy tenure. This money can help them pay for food, rent, school fees, and other daily needs. It is one of the simplest and most affordable ways to protect your loved ones. You only need to pay a small amount regularly, and in return, your family gets a lumpsum amount if you pass away during the policy term. It is not meant for saving or getting returns—it is only for protection. Whether you are young or old, single or married, having a term plan can give you peace of mind. Read More

 

This blog explains why the importance of a term plan is growing these days and how it can support you at every life stage. Read Less

Get in Touch to Know More
I agree and consent to the Terms & Conditions, Privacy Policy
Get Your Life Goals, Done!

Tailored Life Insurance Solutions for your long-term Life Goals.

Written ByShruti gujarathi
AboutShruti gujarathi
LinkedIn Icon
Shruti gujarathi has 5 years of experience in the BFSI sector, and as Manager- Digital Marketing at Bajaj Allianz Life Insurance, manages digital and content marketing. She has had hands-on experience in content strategy, performance marketing and Strategic Alliances over a career spanning 10 years.
Reviewed ByRituraj Singh
AboutRituraj Singh
LinkedIn Icon
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: 03rd June 2025
Modified on: 05th June 2025
Reading Time: 15 Mins
Share

What is Term Life Insurance?


The importance of a term plan is something many people are beginning to understand today. Term life insurance is a simple protection life insurance plan. It provides money to your family in case of your untimely demise during the policy period. You pay a small amount every month, quarterly, half yearly or year, called a premium. In return, the insurer promises to give a sum assured to your nominee if you pass away during the plan term, subject to policy terms and conditions.


Apart from some term plans such as the Term plan with return of premium , there is no maturity benefit if you survive the policy tenure. But it gives peace of mind, knowing your loved ones will not face financial troubles if you’re not around.


Benefits of getting a Term Plan


Getting a term plan has many benefits. Here are the main ones:


  • Financial Protection: Your family will receive money in case of your untimely death. This helps them cover daily expenses, pay bills, and plan for the future.
  • Affordable Premiums: Term plans have lower premiums compared to other life insurance plans . This means you get a high life cover at a small cost.
  • Tax Benefits: You can get benefits under Section 80C of the Income Tax Act, 1961 on the premium paid under old tax regime. Payouts may also get tax exemptions under Section 10(10D).
  • Flexible Options: Some term plans also come with add-ons like accidental death cover, critical illness cover, and more. These help increase the protection.
  • Customization: You can choose how much money your family should get and how long the cover should be.

The importance of a term plan becomes very clear when you think about the safety it brings to your family.


Difference between Term Insurance and Other Life Insurance Plans


Understanding the difference between a term plan and other life insurance plans helps you make the right decision. Here's a simple comparison:


  • Term Plan:


    • Low premium, high cover
    • Unless it is a ROP plan, no money-back if the life assured survives
    • Suitable for pure protection

  • Endowment Plan:


    • High premium as provides a guaranteed* lump sum payout either upon maturity or in the event of the life assured’s death
    • Mix of savings and protection

  • ULIP (Unit Linked Insurance Plan):


    • Life Insurance + market linked funds
    • Returns depend on fund performance


If your goal is only protection and not savings, term insurance is the best and most affordable choice.


Common Misconceptions about Term Life Insurance


Many people think term insurance is not useful or hard to understand. But these are just myths. Here are some common ones:


  • Myth 1: Term insurance is only for married people
    Truth: Even single people can get a term plan to support parents or siblings

  • Myth 2: It is too expensive
    Truth: It is the one of the most budget-friendly life insurance plans.
  • Myth 3: Claims get rejected easily
    Truth: Claims are settled smoothly if the correct details are given at the time of buying. Also do not forget to check the Claim Settlement Ratio (CSR) of life insurance company from where you take policy
  • Myth 4: No benefit if you survive
    Truth: Some term plans return your premium if you survive (term plan with return of premium)

Conclusion


A term plan is valuable as it provides security to your family. It ensures that your loved ones are protected and supported if you weren’t around. The death benefit from the term plan can help them take care of their children’s education and other major expenses. While you won’t receive any financial payout if you outlive the policy term, the peace of mind it offers is valuable.


The younger you buy the plan, the lower the premium you have to pay. A term insurance plan is a practical and smart financial tool. It simply helps you safeguard what is important — your family.


FAQs


Why is financial security through insurance important?


Financial protection means the family can have money to survive if something happens to you. Life Insurance helps protect them from financial trouble in difficult times. If you are the family’s earning source, then your sudden absence may make things difficult for your family. With your term insurance, they'll be able to pay bills, buy food and daily necessities, and stay financially protected. That is why having financial security through insurance is critical for every family.


Why is term insurance necessary?


Term insurance is important because it gives your family money if you are not there anymore. It helps them take care of all their daily needs and pay off loans and other debts. The best part is that term insurance is not costly and gives a large cover. So even if you earn less, you can still get good protection for your family. This makes term insurance a smart and safe choice.


What is the main purpose of life insurance providing financial security?


The main goal of life insurance is to give financial support to your family when you are not around. If you pass away, the money from life insurance can help your family with daily expenses, rent, loans, and school fees. It helps them live without worry. Life insurance is a way to make sure your loved ones are taken care of, even when you are not there. It gives peace of mind and strong money support to the family.


What are the reasons for financial security?


Financial security helps your family live a stable and safe life. It gives them money to manage daily expenses, handle sudden problems like illness, and plan for future goals like education or marriage etc. When you have financial security, your family does not have to depend on others. They can stay strong even if life changes suddenly. That’s why it is important to build financial security—so your loved ones can live well, today and tomorrow, without stress or fear.


Life Insurance Guide -Term Related Articles

Long term investment plans - What Are Their Benefits?

A suitable financial plan may be defined by its components. Amongst other things, one aspect, it may be incomplete without, is a steady amount of investment.

Read More
Long term investment plans - What Are Their Benefits?

A suitable financial plan may be defined by its components. Amongst other things, one aspect, it may be incomplete without, is a steady amount of investment.

Read More
Long term investment plans - What Are Their Benefits?

A suitable financial plan may be defined by its components. Amongst other things, one aspect, it may be incomplete without, is a steady amount of investment.

Read More
Long term investment plans - What Are Their Benefits?

A suitable financial plan may be defined by its components. Amongst other things, one aspect, it may be incomplete without, is a steady amount of investment.

Read More
Disclaimers:
Plus Symbol
Minus Symbol

The views stated in this article are 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 the sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale. Bajaj Allianz Life Insurance Company Ltd., Regd. office Address: Bajaj Allianz House, Airport Road, Yerawada, Pune - 411006, Reg. No.: 116, CIN: U66010PN2001PLC015959, Call us on toll free No.: 1800 209 7272, Mail us: customercare@bajajallianz.co.in

Tax benefits as per prevailing Section 80C (under old tax regime) and Section 10 (10D) 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

 

*Conditions Apply -The Guaranteed benefits are dependent on policy term, premium payment term availed along with other variable factors. For more details, please refer to sales brochure

BJAZ-WEB-EC-15347/25

X
Disclaimer

*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

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

X
Terms & Conditions

I hereby authorize Bajaj Allianz Life Insurance Co. Ltd. to call me on the contact number made available by me on the website with a specific request to call back. I further declare that, irrespective of my contact number being registered on National Customer Preference Register (NCPR) or on National Do Not Call Registry (NDNC), any call made, SMS or WhatsApp sent in response to my request shall not be construed as an Unsolicited Commercial Communication even though the content of the call may be for the purposes of explaining various insurance products and services or solicitation and procurement of insurance business

 

Please refer to BALIC Privacy Policy

X
Disclaimer

%%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

X
Disclaimer

Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V04)

*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%.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116


close
Ask for an Agent
Sign up for personal visit and tailored advice from our expert agents

Claim Settlement Ratio of 99.29%~