Sum Insured
The maximum amount your insurance policy will pay out in a policy year (or per claim, for life insurance).
The maximum amount your insurance policy will pay out in a policy year (or per claim, for life insurance).
For health and property insurance, sum insured is typically the maximum claimable in a policy year across all claims combined (unless a “restoration benefit” applies). For life and term insurance, this is often called the sum assured — the amount paid to your nominee on a valid claim.
Choosing an adequate sum insured is one of the most consequential decisions in buying insurance — too low, and even a valid policy won't fully protect you against a large claim.
Example
With a ₹5 lakh health sum insured and no restoration benefit, a ₹6 lakh hospitalization bill leaves you paying the ₹1 lakh difference yourself, even though your claim was otherwise valid.
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