Sum assured is one of the most crucial terms to understand when it comes to life insurance. Knowing what is sum assured in life insurance can help you select the coverage and ensure adequate financial protection for your loved ones.
What is Sum Assured?
The sum assured is the fixed amount of money the insurer agrees to pay to the beneficiary upon the policyholder's death or upon the occurrence of insured event, based on the terms & condition of the life insurance plan.
It acts as a financial safety net for the policyholder's dependents, providing them with the necessary funds to manage their expenses in the policyholder's absence.
The sum assured is predetermined at the time of policy purchase and remains unchanged throughout the policy term. It is the amount the nominee can claim if the insured event occurs within the policy term.
The sum assured is one of the factors influencing your premium. Understanding what is sum assured and its importance can help in selecting an appropriate life insurance plan.
Determining the Right Sum Assured
Once you know what sum assured is, it becomes crucial to ensure that you choose the right amount for your needs. It should be sufficient to cover your family’s needs without being excessively burdensome on your budget. Usually, an amount that is 10 times your annual income, along with any possible debts and other liabilities, may be considered a good total value for a life insurance sum assured.
By using a life insurance calculator, you can determine the premium you may pay for the desired sum assured amount.
Understanding what is sum assured in life insurance is fundamental to selecting the right policy and ensuring adequate protection for your loved ones. By considering your financial obligations and future goals, you can determine the appropriate sum assured for your needs. This knowledge will empower you to make informed decisions and secure the financial future of your dependents effectively.
Disclaimers:
IndiaFirst Life Insurance Company Limited, IRDAI Regn No.:143, CIN: U66010MH2008PLC183679, Address: 12th & 13th floor, North [C] Wing, Tower 4, Nesco IT Park, Nesco Center, Western Express Highway, Goregaon (East), Mumbai – 400 063. Toll-free No – 18002098700. Email Id:customer.first@indiafirstlife.com, Website: www.indiafirstlife.com, Fax No. +91226570600. For more details on risk factors and terms and conditions, please read the sales brochure carefully before concluding the sale. Trade logo displayed above belongs to our promoter M/s Bank of Baroda and is used by IndiaFirst Life Insurance Co. Ltd. under license.