Alyssa Lane
Sum assured is a term used in life insurance and guaranteed return insurance policies. It refers to a pre-defined amount that is paid to the policyholder's beneficiaries in the event of their death. The premium paid by the policyholder is dependent on the total sum assured. For example, if a policyholder takes out a life insurance policy of Rs 10 lakhs, the insurance company will pay this sum assured amount as a death benefit to the policyholder's nominee. Sum assured is different from sum insured, which defines the reimbursement of an insured loss and is generally applicable to non-life insurance policies such as motor, home, or health insurance.
| Characteristics | Values |
|---|---|
| Sum assured | A predefined amount given to the policyholder's beneficiaries in the event of their death |
| Sum insured | The amount of money you will receive from your guaranteed return insurance plan |
| Sum assured limit | INR 25,00,000 per life, across all policies of SBI Life Insurance Company sold through POSPs and CPSC-SPV |
| Sum assured for riders | Capped at ₹50 lakhs |
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What You'll Learn
Sum assured vs sum insured
Sum assured is a predefined amount that is given to the policyholder's beneficiaries in the event of their death. This concept is applicable to life insurance and guaranteed return insurance policies. The premium paid by the policyholder is dependent on the total sum assured. For example, if a person buys a life insurance policy of Rs 10 lakhs, the insurance company has agreed to pay the sum assured amount as a death benefit to the nominee in case of the policyholder's death. The maximum sum assured limit of INR 25,00,000 per life is applicable across all policies of SBI Life Insurance Company sold through POSPs and CPSC-SPV.
On the other hand, sum insured defines the reimbursement of an insured loss. Sum insured in an insurance policy can be characterised as the principle of indemnity that provides protection or cover for damage, loss, or injury. This concept is generally applicable to non-life insurance policies such as motor, home, or health insurance. The basic idea behind this policy is to ensure that monetary benefits are not made by the policyholders and only their losses are covered. Sum insured can be defined as the amount of money that you will receive from your guaranteed return insurance plan.
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Sum assured and life insurance
Sum assured is a predefined amount that is given to the policyholder's beneficiaries in the event of their death. This concept is applicable to life insurance and guaranteed return insurance policies. The premium paid by the policyholder to the insurance company is dependent on the total sum assured. For example, if a person buys a life insurance policy of Rs 10 lakhs, the insurance company has agreed to pay the sum assured amount as a death benefit to the policyholder's nominee in case of their untimely demise. Sum assured is different from sum insured, which defines the reimbursement of an insured loss. Sum insured is generally applicable for non-life insurance policies such as motor, home, or health insurance. The basic idea behind this policy is to ensure that monetary benefits are not made by the policyholders and only their losses are covered.
SBI Life Insurance offers a range of life insurance plans with different sum assured limits. For example, the New Smart Samriddhi plan has a maximum sum assured limit of INR 25,00,000 per life, across all policies of SBI Life Insurance Company sold through POSPs and CPSC-SPV. On the other hand, the pure-term insurance plan catering to the low-income population offers a decent range of coverage extending from ₹10,000 to ₹50,000. It is important to note that the total sum assured for certain riders may be capped at a certain amount, such as ₹50 lakhs, and the amount cannot exceed the base sum assured.
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Sum assured and guaranteed return insurance policies
Sum assured is a predefined amount that is given to the policyholder’s beneficiaries in the event of their death. This concept is applicable to life insurance and guaranteed return insurance policies. The premium paid by the policyholder to the insurance company is dependent on the total sum assured. For example, if a person buys a life insurance policy of Rs 10 lakhs, the insurance company has agreed to pay the sum assured amount as a death benefit to the nominee in case of the policyholder's death. The total sum assured for these two riders is capped at ₹50 lakhs (additionally, the amount cannot exceed your base sum assured).
Sum assured is different from sum insured. Sum insured defines the reimbursement of an insured loss. Sum insured in an insurance policy can be characterised as the principle of indemnity that provides protection/cover for damage, loss, or injury. Generally, this concept is applicable for non-life insurance policies such as motor, home, or health insurance. The basic idea behind this policy is to ensure that monetary benefits are not made by the policyholders and only their losses are covered. Sum insured can be defined as the amount of money that you will receive from your guaranteed return insurance plan.
SBI Life Insurance offers a range of guaranteed return insurance policies with different sum assured limits. For example, the New Smart Samriddhi plan has a maximum sum assured limit of INR 25,00,000 per life, across all policies of SBI Life insurance company sold through POSPs and CPSC-SPV. The Guaranteed Additions (GA) would apply on the cumulative premiums paid, which is the sum of the premiums paid by the policyholder till date, excluding taxes, rider premiums, underwriting extra premiums and loading for the modal premiums, if any, at the end of each policy year for in-force policies, at a simple rate.
It is important to note that the sum assured amount is not the same as the sum insured amount. The sum assured is the amount that the insurance company has agreed to pay in the event of the policyholder's death, while the sum insured is the amount that the policyholder will receive from their guaranteed return insurance plan.
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Sum assured and the premium paid
Sum assured is a predefined amount that is given to the policyholder's beneficiaries in the event of their death. This concept is applicable to life insurance and guaranteed return insurance policies. The premium paid by the policyholder to the insurance company is dependent on the total sum assured. For example, if a policyholder takes out life insurance of Rs 10 lakhs, the insurance company has agreed to pay the sum assured amount as a death benefit to the policyholder's nominee in the event of their death. The sum assured for SBI Life insurance is capped at ₹50 lakhs.
Sum insured, on the other hand, defines the reimbursement of an insured loss. Sum insured in an insurance policy can be characterised as the principle of indemnity that provides protection/cover for damage, loss, or injury. This concept is generally applicable for non-life insurance policies such as motor, home, or health insurance. The basic idea behind this policy is to ensure that monetary benefits are not made by the policyholders and only their losses are covered. Sum insured can be defined as the amount of money that you will receive from your guaranteed return insurance plan.
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Sum assured and the policyholder
Sum assured is a predefined amount that is given to the policyholder's beneficiaries in the event of their death. This concept is applicable to life insurance and guaranteed return insurance policies. The premium paid by the policyholder to the insurance company is dependent on the total sum assured. For example, if a policyholder takes out a life insurance policy of Rs 10 lakhs, the insurance company has agreed to pay the sum assured amount as a death benefit to the policyholder's nominee in the event of their death.
The sum assured is different from the sum insured, which defines the reimbursement of an insured loss. Sum insured is the principle of indemnity that provides protection or cover for damage, loss, or injury. This concept is generally applicable to non-life insurance policies such as motor, home, or health insurance. The basic idea behind this policy is to ensure that monetary benefits are not made by the policyholders and only their losses are covered.
In the context of SBI Life Insurance, the sum assured limit is INR 25,00,000 per life, across all policies of the SBI Life Insurance company sold through POSPs and CPSC-SPV. This limit is applicable even if the life assured is a minor. Additionally, SBI Life Insurance offers a pure-term insurance plan that caters to the low-income population, with a sum assured range extending from ₹10,000 to ₹50,000. This plan includes a standard death benefit perk, with premiums as low as ₹300 up to a maximum of ₹2000.
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Frequently asked questions
Sum assured is a predefined amount that is given to the policyholder's beneficiaries in the event of their death.
The premium paid by the policyholder to the insurance company is dependent on the total sum assured. For example, if a policyholder buys a life insurance policy of Rs 10 lakhs, the insurance company has agreed to pay the sum assured amount as a death benefit to the policyholder's nominee in case of their untimely demise.
Sum assured is applicable to life insurance and guaranteed return insurance policies, while sum insured is applicable to non-life insurance policies such as motor, home, or health insurance. Sum insured defines the reimbursement of an insured loss and is based on the principle of indemnity, which provides protection or cover for damage, loss, or injury.
