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Jul 27 2020


The spike in infectious diseases and medical expenses has necessitated the purchase of a health insurance policy. It enables an individual to access medical treatment via the payment of a premium in yearly instalments. However, the individual must understand the concept of sum insured in health insurance to get optimum coverage. A health insurance policy is meant to assist you medically and cover you financially.  The sum insured in health insurance is the amount that an insurer gets covered for.

Let us take an instance to simplify the concept. Say the sum insured by a particular insurance company is 10 lakh per year.  It includes the hospitalizations bills, consultation fees, diagnostics, etc. If the bill amounts to 12 lakh then the company will compensate only the 10 lakh sum insured. The individual has to pay the balance of INR 2 lakh from his or her own pocket.

To get a higher sum insured in health insurance, one has to pay a higher premium. Irrespective of the number claims made for various hospitalizations, the company will only pay the sum insured. The individual has to bear the expenses once the insured amount exhausts before the policy expires.


Often there is confusion between these two terms. In this comparison between the sum insured vs. sum assured, let us underline the distinction. ‘Sum Assured’ is a life insurance terminology, i.e. the pre-defined amount that the insurer guarantees to the policyholder in case of an eventuality. In a life insurance policy, it is the amount guaranteed to the insured after the policy term is up.

Sum Insured however, is a term that applies to non life insurance ie. Car, fire, health insurance etc. It stipulates the amount to which you are able to reimburse or claim back from the insurer, in accordance to the stipulated rules and regulations that govern the insurance policy in question.


Illness and disability are the harsh realities of life. It inflicts emotional damage to the family and often results in a fiscal burden. Only proper health insurance can spare us the financial worry in extreme medical situations. A health insurance policy can provide us medical aid and healthcare amenities without any fuss. Hence it is extremely important to choose a plan that befits one’s requirement and budget. Investing in a health insurance policy gives us the boon of mental peace and medical security. So, do not think twice when it comes to your family’s well-being.