InsuranceFinancial Glossary
Sum Assured
Definition
The guaranteed amount payable under a life insurance policy upon the occurrence of the insured event (death, maturity, or critical illness). In term insurance, the sum assured is the death benefit paid to nominees. In endowment plans, it may also include bonuses accumulated over the policy term.
Why It Matters
Your sum assured should be 10-15 times your annual income for term insurance. A Rs 50,000 per month earner needs at least Rs 60 lakh to Rs 90 lakh in term cover. Many people are dangerously underinsured with sum assured of Rs 5-10 lakh from employer group cover, which is insufficient for a family's long-term financial needs.