sum insured in health insurance

Sum Insured in Health Insurance: Meaning & Importance

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When an individual buys life insurance from a trusted insurance provider, they provide the policyholder financial security to their opted beneficiaries/nominees in their absence. 

The insurance providers and the policyholders undersign a contract of fixed and pre-decided sum insured that’s payable to the nominees or family members of the policyholder after their demise. So, buying a policy is important but buying it with an adequate amount of sum insured is a real win-win situation for the person insured and his/her beneficiaries.  

What is sum insured in health insurance?

Sum insured is an amount that an insurance company pays to the policyholder when they are in need of a medical expense. The sum insured in health insurance is the upper limit or the extent to the company will pay for your medical coverage mentioned in the policy.  

What is the effect of sum insured?

If a policyholder has enabled protection of an adequate sum insured, it allows them to access a broad claim without any monetary constraints in times of unforeseen / unexpected requirements. Having a coverage of a bigger sum insured provides a policyholder the utmost financial protection without worrying for future discrepancies. 

What is the difference between sum assured and sum insured?

This table elucidates the common differences between sum assured and sum insured:-


Sum Assured Sum Insured
It is offered by a life insurance companies It is offered by health or car insurance companies
The coverage benefits are calculated by Human Life Value Coverage benefits are paid according to the value of assets 
It’s a pre-decided fixed amount that the company pays while buying life insurance policy It’s a compensatory amount paid to the policyholder for the incurred damages

What is the limit of sum insured?

A limit of sum insured is defined as the maximum amount paid to the policyholder by insurance providers to provide them coverage after the insurance claim is raised. The average or standard sum insured limit variably depends upon the type of policy and the coverage amount you choose. Higher the sum insured, higher will be the coverage amount paid to the policyholder. 

What is the benefit of Sum Insured?

There are several benefits of sum insured for the policyholders, here are given few of them:-

  1. Financial Protection:- Sum Insured makes it possible that you are not stuck amid any financial constraints or in an unexpectedly worse situation without a financial backup.
  2. Risk management:- It helps avoid the risk coming along your way with its mechanism of covering the policyholders with a security net of shared financial risks.
  3. Policy Customization:- A policyholder can customize his/her life insurance policy with an adequate amount of sum insured to provide their loved ones optimum protection.
  4. Legal Coverage:- In a situation where your family members need a mortgage or debt planning after your demise, a good amount of sum insured could help adamantly. 
  5. Future Goals Security:- Broader sum insured makes sure that a policyholder could get his/her family members or loved ones secured even in an unforeseen event, or to cover his/her child’s education, marriage, spouse’s financial crisis management, etc. 

Can I change the Sum Insured of my Health Insurance Plan?

More often an insured individual may require a huge amount to cover all their medical needs. But it’s possible that the person insured had purchased a plan with low sum insured. In this case, the policyholder can increase their sum insured with top-up or super-top-up health plans.  


With an understanding of sum insured and sum assured, you can apparently become able to opt the best health insurance companies for yourself, that too, without paying any extra premium amount. Going with a suitable amount of sum insured will save you from any future failure or financial constraints, so choose your sum insured or sum assured with the policy plan wisely.

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