2. Sum assured is also known as the cover or the
coverage and is the total amount you are insured
for.
Sum assured is
◦ “the amount of money an insurance
policy guarantees to pay before any bonuses are
added”.
◦ “the guaranteed amount insured will receive”.
Dr. Amitabh Mishra
3. On the event of death, the Sum Assured will go to
the nominee or insured beneficiary as per the
policy.
Sum Assured is the reason why an insured pays
premium.
Dr. Amitabh Mishra
4. Sum assured should be revised , when there is a
major change in insured financial situation. As:
◦ Change in marital status (get married or divorced)
◦ Birth and death in the family that adds to or reduces the
number of your financial dependents.
◦ When take a home loan
◦ A rise in salary
◦ When children are financially independent
Dr. Amitabh Mishra
5. Bonus is
◦ “the amount given in addition to the sum
assured”
Maturity value is
◦ The amount the insurance company has to pay
you when the policy matures.
◦ Maturity value would include the sum assured
and the bonuses.
Dr. Amitabh Mishra
6. Riders are:
◦ “special provisions in an insurance policy that can expand
the benefits or the sum assured that is payable.
◦ “an add-on cover to the base policy that provides
additional benefits”.
◦ There are a range of optional riders that insured can buy at
an additional premium to suit his needs.
Dr. Amitabh Mishra
7. ◦ There are many riders which insurance companies
offer, including :
Rider for accidental death: In addition to being eligible for
the death benefit, policy will also pay out an additional
amount if your death is due to an accident, as defined in the
rider.
Rider for disability: In case insured don’t die but an
accident disables him, the rider will compensate up to your
pre-determined amount.
Rider for Critical illness: pays a lump sum if the
policyholder contracts any of the specified critical
illnesses.
Dr. Amitabh Mishra
8. Sum Assured depends on many factors
such as:
◦ Insured total net assets,
◦ Insured family’s current fixed annual income
◦ Insured family’s current fixed annual
expenditure
Dr. Amitabh Mishra
9. ◦ Insured age
◦ The age of insured dependents,
◦ Current health condition and health history
◦ Lifestyle and hobbies
◦ Driving Record
◦ Any loans or liabilities due
Dr. Amitabh Mishra