July 23, 2021

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What is the sum assured in an insurance cover?

sum assured

sum assured

The sum assured depends upon the income of the person and typically a maximum of up to 10 times the annual income is allowed as the sum assured.

Sum assured is the value of the insurance cover provided at the time of buying the insurance policy.

In any case of any eventuality, like death, the sum assured is the amount that is paid to the beneficiary.

The sum assured depends upon the income of the person and typically a maximum of up to 10 times the annual income is allowed as the sum assured.

Sum assured, if computed in terms of expenses, should be at least 12-15 times the annual expenses with debt obligations, such as a home loan, also accounted for.

Sum assured should be more that 10 times the annual premium to be entitled to tax benefits under Section 80C and maturity proceeds being tax free under Section 10(10D).