Differences Between Sum Assured and Death Benefit

What is Sum Assured?

What is Death Benefit?

Sum Assured Vs Death Benefit

The following are some key differences between sum assured and death benefit:

Parameter Sum Assured Death Benefit
Definition It is a predetermined amount that an insurance company will have to provide to nominees in case of the sudden demise of insured individuals. So, it is also a death benefit. Death benefit is also the amount that nominees get after the death of a covered individual within the policy term.
However, its total value is not predetermined. This is because claimable amounts of additional benefits are variable.
Amount Sum assured amount is lower than the death benefit. Death benefits include the sum assured as well as additional bonuses. So, it is higher in amount.

Knowing these inherent differences between sum assured and the death benefit is important to understand the exact financial coverage your family gets under the policy. You should choose a suitable life insurance plan keeping their needs in mind.

FAQs about Sum Assured and Death Benefit

How to claim death benefits of a life insurance policy? up-arrow

You need to first get in touch with the insurance company to inform them about the policyholder's demise. After that, you will have to fill in the claim form properly and submit it with all the necessary documents. After this, the insurance company will provide you with the death benefits after completing the investigation and document verification processes.

What is the maturity benefit? up-arrow

A life insurance plan's maturity benefit is an amount you will get after the end of your policy period. The insurance company directly pays this amount to the policyholder.

What are the documents that I need to provide to claim death benefits? up-arrow

Following are some important documents that you will need to submit to claim death benefits:

  • Original policy papers
  • Death certificate
  • Age proof of the policyholder
  • ID proof of nominee
  • Hospital records
  • Medical certificate

You may have to submit a Police FIR and post-mortem report if the death is unnatural.

 

What is the minimum death benefit that an insurance company will have to provide? up-arrow

IRDAI mandates that insurance companies will have to pay a minimum death benefit, as mentioned below:

 

  • If policyholders are below 45 years old, the minimum death benefit will be at 10 times of premium.
  • If policyholders are above 45 years old, this benefit will be at least 7 times of premium.