Sum-insured is the total amount that policyholders can use towards their medical expenses as directed by the policy’s terms and conditions. Sum-insured is given by the insurer to the policyholder. In this case, the group health insurance policy will have a set sum insured amount. The employees can use this amount to pay for the medical expenses generated according to the terms and conditions of the policy.

What is sum-insured in group health insurance?

Sum-insured is the total amount for a year the insurance company provides to the policyholders in case the insured gets hospitalized. Sum-insured is not a monetary benefit but refers to the overall sum assured to the policyholder that can be reimbursed during medical emergencies.

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Read: Restoration benefit in health insurance

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In short, sum-insured meaning is nothing but the maximum amount of medical expenses that are borne by the insurance company as per the terms and conditions of the policy to the policyholder.

For eg: Ankita has a group health insurance policy of 3 lacs. She gets hospitalized due to a serious illness and bears a bill of 2.75 lakhs. The insurance company then pays the entire 2.75 lacs to cover her expenses as it falls under the sum insured. Had the hospital bill been 3 lacs, the insurance company would have still paid 2.75 lakhs and the remaining amount of 25,000 rupees would have been paid by Ankita.

Also read: Group health insurance claim

What is the difference between sum-insured and sum-assured?

The difference between insured and assured is the amount that is reimbursed and the amount that comes as a fixed amount by the end of the tenure of the insurance policy respectively.

In simple words, the sum assured is the amount promised in the case of life insurance that is guaranteed by the end of the policy. A sum assured is the fixed amount that you or the beneficiary receives by the end of the policy tenure.

For eg: A term life insurance policy may provide 18 lakhs cover to the beneficiary on the death of the policyholder or the end of the policy tenure. So as promised, he/she would receive a total of 18 lakhs as the sum assured without any failure.

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