An insurance policy is integral to ensuring financial security for individuals and their family members from uncertain life events. There are various insurance jargons like sum assured, maturity amount which need to be understood by the policy holder while taking out an insurance plan.
The sum assured refers to the amount guaranteed by an insurance policy whereas maturity value refers to the amount paid by an insurance company to the policy holder on maturity of the said policy.
Let us understand the difference between the two insurance terms so as to help us understand what would be the sum assured and maturity value of your insurance plan.
Sum Assured
- Amount of money which an insurance policy assures before paying up any bonuses
- Guaranteed amount which the policy holder will receive
- Known as the cover or coverage
- Pertains to the total amount insured for by the policyholder
Maturity Value
- Amount paid on maturity of the insurance policy
- Includes the sum assured and the bonuses
Points to Note:
Sum assured and maturity amount are key insurance terms
Both relate to the amount to be payable to the policyholder for the specific policy taken