What Is Sum Insured & Sum Assured In Health Insurance

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Want to know about Sum Insured & Sum Assured? Then you must read this post. Inside you'll find detailed info about sum insured and assured. Read to know

Want to know about Sum Insured & Sum Assured? Then you must read this post. Inside you'll find detailed info about sum insured and assured. Read to know

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May 16, 2023
What Is Sum Insured & Sum Assured In Health Insurance
What Is Sum Insured & Sum Assured In Health Insurance

Ever felt like you're tiptoeing through a minefield when picking a health insurance plan for your team? You're not alone. We've all been there - juggling jargon, weighing options, trying to decipher 'sum insured' from 'sum assured.' 

But what if I told you that navigating this health insurance maze could be as easy as a walk in the park?

Today, we're diving into the heart of health insurance, stripping away the gobbledygook, and shining a light on 'sum insured' and 'sum assured.' These terms might seem identical, but they're as different as tango and twerk.

Let's start with a little story. 

Picture this: It's a calm day at the office. Suddenly, a medical emergency strikes an employee. You're prepared, though. The health insurance plan you selected comes to the rescue, saving the day with its monetary benefits. But wait! The insurance company says they will only pay up to a certain limit. That limit, my friends, is what we call the 'sum insured' in health insurance.

Now, let's imagine another scenario. This time, it involves life insurance. An unexpected event occurs, and the policyholder's family receives a predefined amount from the insurance company. That's 'sum assured' for you. 

Understanding these terms is your first step to empowering your workforce with the best possible insurance coverage. 

What Is The Sum Insured In Health Insurance?

Let's pop open the hood of 'sum insured in health insurance.' It's a term that's thrown around quite a lot, but what does it actually mean? 

Picture it as a financial safety net, ready to catch your employees when medical emergencies strike. It's the maximum amount - the big cheese, the head honcho - that the insurance company will pay for medical expenses during the policy period.

Now, let's break it down into bite-sized, easy-to-digest nuggets of information:

The Big Limit: The sum insured is your go-to guy, the maximum payout your insurance company commits to in case of a medical emergency. Think of it as a safety cap on your monetary benefits.

Flexibility is Key: You, as the policyholder, choose the sum insured when buying the policy. It's like picking a customized safety net for your employees.

Your Premium Buddy: The higher the sum insured, the higher the insurance premium. It's a delicate balancing act between coverage and cost. 

Health Condition Matters: A person with pre-existing health conditions might opt for a higher sum insured. 

Family Floater Fun: In a family floater plan, the sum insured is shared among family members. 

When it comes to the sum insured, it's about matching the sum insured to the unique needs and health conditions of your employees.

What Is The Sum Assured In Health Insurance?

Now that we've untangled the knots of 'sum insured,' let's shimmy our way over to its cousin - 'sum assured.' 

If the sum insured is the safety net, the sum assured is the life raft, a predetermined payout that's handed over in case of an unfortunate event.

But remember, sum assured is typically associated with life insurance, not health insurance.

The Sure Bet: Sum assured is the guaranteed amount that the beneficiaries receive in case of an unfortunate event. 

Set at the Start: This amount is fixed when you're buying the policy. It's like setting your GPS destination before you start your journey.

Not Health, but Life: Sum assured is typically found in life insurance policies, not health insurance. 

Premium Link: The premium you pay is directly linked to the sum assured. The higher the sum assured, the higher the premium. 

Okay, so we've just played a game of 'spot the difference' between the sum insured and the sum assured. You might be thinking, "Why does it matter?"

It matters because understanding these terms is like having a compass in the confusing world of insurance. It helps you navigate, make informed decisions, and ensure your employees get the best protection possible.

Why Is It Important To Choose The Right Sum Insured In Health Insurance?

The importance of choosing the right sum insured is like the importance of an anchor in a storm. It's the guarantee that when a medical emergency hits - and it can hit like a hurricane - your employees won't be left floundering in financial chaos. 

The right sum insured ensures they get the help they need, without draining their savings or your company's resources. 

Remember, your goal as an HR leader isn't just to provide any health insurance plan; it's to provide the right plan. 

One that meets your employees' needs, reflects their health condition, suits their life stage, and fits within your budget. 

Choosing the right sum insured is not just a financial decision; it's a commitment to your employees' wellbeing. It's a statement that you care. 

How To Determine The Right Sum Insured?

1. Scrutinize Health Conditions: The healthier, the lower sum insured might be needed.

2. Weigh Up Lifestyle Risks: Risky hobbies or jobs? Opt for a higher sum insured.

3. Assess Family Medical History: A dicey genetic pool could warrant a higher sum.

4. Consider Age and Life Stage: Young, single employees might need less than older, family folks.

5. Review Income Levels: Ensure premiums won't drain the wallet, but the coverage is ample.

6. Forecast Future Medical Inflation: Remember, medical costs are scaling the beanstalk year after year.

7. Revisit Annually: Life changes, and so should the sum insured. Regular reviews are key.

Differences Between The Sum Insured And Sum Assured

1. Type of Insurance: The sum insured is your buddy in health insurance, sum assured is the star player in life insurance.

2. Nature of Payout: The sum insured works on the principle of indemnity - it's only paid out up to the actual expenses. On the flip side, the sum assured is the promised total paid out regardless of the costs incurred.

3. Policyholder Influence: While you get to pick your sum insured, the sum assured is usually a fixed amount, chosen at the start, and doesn't waver.

4. Link with Premium: Higher the sum insured or sum assured, the bigger the chunk taken out of your pocket for the premium.

5. Purpose: The sum insured is the maximum amount that can be claimed in a policy year, whereas the sum assured is the predetermined amount that the beneficiaries receive in case of the insured's demise.

6. Changeability: The sum insured can be revised annually, but the sum assured? It's a 'set it and forget it' deal. Once chosen, it stays put.

Be The Guardian Of Your Team’s Wellbeing

We've ventured through the intriguing labyrinth of health insurance, unlocking the mysteries of 'sum insured' and 'sum assured.' 

We've seen how these terms aren't just jargon - they're lifelines in the swirling sea of life's uncertainties. 

Let's take a moment to tie together our journey's nuggets of wisdom:

The sum insured is your maximum claim limit in a policy year.

Sum assured is a predetermined payout typically found in life insurance.

Picking the right sum insured is pivotal - it's your safety net's height.

Determining the right sum insured involves considering health, lifestyle, family history, life stage, income levels, and the relentless march of medical inflation.

Sum insured and sum assured, while similar sounding, have distinct roles to play. 

Now, it's time to put all this knowledge into action. And that's where Loop comes in.

Loop understands the nuances of health insurance. We’re crafting a protective shield, tailor-made for your employees. With Loop, you're not just an HR leader, but a guardian of your team's wellbeing. 

Navigating the health insurance maze can be a daunting task. But with Loop, it doesn't have to be. 

We're here to guide you through the twists and turns, ensuring you make informed, thoughtful decisions. 

Don't just insure. Assure. And to do that, make Loop your health benefits partner. Why not hop over to our site and see how we can help? The perfect health benefits plan for your employees is just a click away. After all, your team deserves nothing but the best!

What Is Sum Insured & Sum Assured In Health Insurance
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Team Loop
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