If you are confused by personal finance terms, jargon and calculations, here’s a new series to simplify and deconstruct these for you. In the fourth part of this series, Riju Mehta explains the difference between sum insured and sum assured.
Getty ImagesSum assured is a term used only in life insurance
Though the two insurance-related terms appear to be similar and are often used interchangeably, these differ from each other in several ways. Sum assured It’s a term used only in life insurance, and as the name suggests, it is an assured, predefined amount given either to the policyholder if he survives the term, or to his nominee/beneficiary, if he passes away during the term. Sum insured It’s a term used in general insurance, and is basically a reimbursement for any loss, damage or injury/illness suffered by the policyholder. Here are some other differences between the two types of coverages.
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