Answer Book question
The amount the insurer promises to pay on the insured event. usually death. not the amount you pay, and not necessarily the amount you get at maturity. On a ULIP or some endowments the death benefit may be defined differently, so read the schedule.
The amount the insurer promises to pay on the insured event. usually death. not the amount you pay, and not necessarily the amount you get at maturity. On a ULIP or some endowments the death benefit may be defined differently, so read the schedule.
A family is told their father had "₹10 lakh LIC." On the document, the sum assured is ₹2 lakh; ₹10 lakh was the total premium he paid over 30 years. Another family thinks the ₹5 lakh figure on a ULIP statement is the death benefit; it is the fund value, and the death benefit clause says "higher of fund value or sum assured of ₹3 lakh."
Sum assured is the contractual cover amount. In a term policy, it is the whole story. In an endowment, bonuses are added to it over time so the maturity or death payout exceeds it. In a ULIP, the death benefit is usually the higher of sum assured and fund value, or sometimes the sum of the two; the policy defines which.
The "sum assured" line on the schedule The death-benefit clause. is it sum assured, sum assured plus bonuses, or higher-of Any accrued bonus shown on the latest statement Any rider amounts (accident, critical illness) shown separately
Premium paid is not cover. Fund value is not cover. Maturity value is not cover. Only the death-benefit definition in the policy is cover.
Many Kerala policies are decades old and the schedule is in a cupboard. The insurer's portal or branch can re-issue a status statement showing the current sum assured and bonuses.
Endowment, sum assured ₹5 lakh, accrued bonus ₹3.2 lakh: death benefit today ≈ ₹8.2 lakh. ULIP, sum assured ₹3 lakh, fund value ₹5 lakh, higher-of clause: death benefit ₹5 lakh.
None. this is a definition. But it is the definition people get wrong most often when estimating how protected the family is.
Find the sum assured and death-benefit clause on each policy Write the real death benefit next to each Total it and compare with the cover you need
I have four insurance policies. What exactly do I have? How much life insurance do I need?
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