The terms "sum assured" and "sum insured" are critical in the insurance world and have to be understood in order to make the right decision. While these two terms are often considered to be synonymous, this is not so and impacts policyholders differently. The article explains the difference in sum assured and sum insured and guides you in which is best for your needs.
This is a fixed sum which does not change unless a policyholder adds extra riders or options to increase his coverage. The sum assured is a fixed amount that the insurance company will pay to the policyholder or beneficiary upon occurrence of a certain event such as death in life insurance. It is a fixed value, which does not change unless the policyholder adds extra riders or options in order to increase the coverage.
Sum insured is that amount up to which the insurance company is liable to pay in case of a loss or claim under general insurance policies like health, motor, and home insurance. Sum assured is not the same as sum insured because it does not depend on the value of the asset to be insured or the medical bills to be paid.
If you need to secure your family's future in case of death, then you must select a life insurance plan, which includes an adequate sum assured.
A sum assured product is suitable for long-term goals like retirement planning, education for children, or securing a future source of income.
If your coverage is about loss of potential finances or medical bills, then you may need to consider general insurance policies that include a sum insured. A sum insured is the right fit for short-term management of financial risks. This could be the payment of hospital bills, repairing damaged vehicles, or protection for your property.
In conclusion, sum assured and sum insured are different words, which are supposed to be known in case someone is purchasing an insurance policy. Sum assured applies for life insurance products offering fixed payout, while sum insured applies for general insurance policies offering indemnity-based protection. The right choice will, therefore, depend on one's financial goals, risk which one wants to cover up for, and the particular kind of insurance product that should satisfy the needs. Evaluate your current liabilities, potential future expenses, and the risks you want to cover in decision-making in order to have an effective cover for yourself and your family.
Sum assured and sum insured are often used interchangeably, but the difference is vast.
The only difference between sum assured and sum insured is the nature of the insurance they represent. Sum assured is a guaranteed fixed amount to be paid by the insurer, usually in life insurance policies. Sum insured, on the other hand, is the maximum payable amount in general insurance policies, such as health or motor insurance. The insurer reimburses the actual losses or expenses incurred, up to the amount insured.
No, actual expenses in a claim can’t be covered by the sum insured. This sum insured means the liability upper limit for an insurer while the amount of reimbursement would depend on this basis of the loss incurred or expense, and therefore, just that loss incurred will be compensated if the actual claim amount is smaller than sum insured, and not the total of the amount of the sum insured will be paid back to the client by the firm.
A. Sum insured is a term that is used with general insurance policies, health, motor, or house insurance. Sum insured acts as an indicator of the value of the asset or potential medical bills that are insured. Because sum insured operates as a cap, the liability of the insurer is restricted to the amount insured. Generally, it covers a specified risk like hospital bills or vehicle repair and property damages.
Piyush Kataria, SEO Manager at PNB MetLife, is a seasoned digital marketing strategist with over a decade of experience in optimizing websites for search engines. His expertise extends to keyword research, content strategy, technical SEO, and link building, all of which have been instrumental in driving organic traffic growth at PNB MetLife. With a strong foundation in life insurance, Piyush leverages his industry knowledge to create targeted and effective SEO campaigns.
Sakshi Malhotra is a seasoned marketing professional associated with the Life Insurance industry since 2007. At PNB MetLife, she heads Digital Marketing and Direct to Customer line of business. She is responsible for driving effective customer engagement through the company’s website and social media channels. In addition, she drives customer online buying journeys to help them buy the right product.
Disclaimer:
The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.
PNB MetLife India Insurance Company Limited Registered office address: Unit No. 701, 702 & 703, 7th Floor, West Wing, Raheja Towers, 26/27 M G Road, Bangalore -560001, Karnataka
IRDAI Registration number 117 | CIN U66010KA2001PLC028883
Terms & conditions apply, Benefits stipulated are subject to premiums paid and policies in-force. For more details on risk factors, please read the sales brochure and the terms and conditions of the policy, carefully before concluding the sale.
Tax benefits are as per the Income Tax Act, 1961, & are subject to amendments made thereto from time to time. Please consult your tax consultant for more details.
Goods and Services Tax (GST) shall be levied as per prevailing tax laws which are subject to change from time to time.
The marks "PNB" and "MetLife" are registered trademarks of Punjab National Bank and Metropolitan Life Insurance Company, respectively. PNB MetLife India Insurance Company Limited is a licensed user of these marks.
Call us Toll-free at 1-800-425-6969, Website: www.pnbmetlife.com, Email: indiaservice@pnbmetlife.co.in or Write to us: 1st Floor, Techniplex -1, Techniplex Complex, Off Veer Savarkar Flyover, Goregaon (West), Mumbai – 400062, Maharashtra.
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