Sum Assured
- What is Sum Assured meaning
- what is some assured
- what is its importance in insurance
- how much sum assured should be taken.
- How much Sum Assured can you get based on your income,
- what is the difference between some assured and maturity value?
Whoever has insured must have heard it, but do you know what some assured really means and why it is important to know. If you have also taken life insurance or taken health insurance, understand how much money you can get based on some assured information and your insurance claim.
Sum Assured
Sum Assured or sum assured is the amount that guarantees to give an insurance policy before any bonus is added. In other words, this guaranteed insurance amount will be received by the policyholder. It is also known as cover or coverage amount and is the total amount for which a person is insured.
Sum Assured and Maturity Value Maturity Value or Maturity Value
Maturity price is what the insurance company has to pay to a person when the policy matures, which will include Sum Assured and bonuses. If the policy holder dies before the policy matures, the beneficiary also gets the insurance amount along with the bonus (till then declared).
Suppose there is some assured 2,00,000 in a policy, and the policyholder is alive till the policy matures, he will get a bonus of 2,00,000 and a bonus announced during the tenure of the policy.
Some assured policy is fixed at the time of taking but maturity value is withdrawn keeping in view the bonus announced during the policy period at the end of the policy period.
Importance of Sum Assured
In fact, we take insurance only for Sum Assured. The amount of sum assured affects the insured during the period of insurance and the amount of claim at the time of claim.
The premium of life insurance is determined on the basis of some assured which has an impact on the insured during the period of insurance. The maturity amount of the insurance or the amount of claim also depends on the sum assured.
At the time of signing the life insurance contract, the insurer and the insurer i.e. the buyer of the policy agree to the amount payable on the death of the insured. It is assigned to the nominee who is decided by the insured. In fact Sum Assured is the amount for which the insured pays the premium.
How to determine Deciding Sum Assured Amount
Some assured or insurance amount should be such that if the insured is not there, his family can provide their full support unless someone else in the family is able to earn. Generally, 8 times the annual income of the insured should be taken as sum assured. Your premium is also determined according to the amount you take.
There are many other premium fixation factors that need to be known. If you are taking a profitless plan, also take care of the possible bonus which increases the maturity amount.
Keep inflation in Sum Assured determination
Inflation should also be taken care of before setting Sum Assured. The amount you spend today in the current lifestyle can increase manifold in twenty years. It is also necessary to determine some assured.
How much Sum Assured can you take
It's not that no matter how Sum Assured anyone takes. Insurance companies determine how much even assured you can take. It mostly depends on your income. Your current income should be in the same proportion to get a large sum assured.
The norms for this are almost one for all insurance companies. For this, the insurance company may also ask you for proof of your income for the current or last three years.
Hope you have understood Sum Assured and all misconceptions about it must have been cleared.
Hi , This is Pramod Choudhary from Nagaur Rajasthan India. I an student and I would like to share my positive thinking with everyone that's my passion . Thank you
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