Sum assured is the guaranteed amount that an insurance policyholder will receive upon the occurrence of an event that triggers a claim. The sum assured is usually determined by various factors, including the policyholder's age, health status, income, and the type of insurance policy they choose.
The sum assured for a life insurance policy is typically based on the policyholder's income, expenses, liabilities, and the financial needs of their dependents. As a general rule of thumb, the sum assured for a life insurance policy should be at least 10 times the policyholder's annual income.
How to Calculate the Sum Assured in Life Insurance?
The calculation of the sum assured in life insurance varies depending on the type of life insurance policy and the specific terms and conditions of the policy. Here are some common methods used to calculate the sum assured:
- Human Life Value (HLV) Method: This method is commonly used to calculate the sum assured for life insurance policies. It involves assessing the financial value of an individual's life based on their income, future earnings potential, and other factors.
- Needs Analysis Method: This approach considers the financial needs of the insured and their beneficiaries in the event of the insured's death. It takes into account factors such as outstanding debts, future expenses, income replacement, and any other financial obligations. The sum assured is calculated based on an estimation of these needs.
- Multiple of Income Method: In this method, the sum assured is calculated by multiplying the insured individual's annual income by a specific factor. The factor is typically determined based on the policyholder's age, occupation, and other factors. For example, a common rule of thumb is to have a sum assured of 10 times the annual income.
What is the Sum Assured in LIC Life Insurance?
The sum assured in LIC Life Insurance refers to the amount of money that the insurer promises to pay to the nominee in the event of the policyholder's untimely death.
How Do I Calculate The Sum Assured Value of ICICI Prudential Whole Life?
The sum assured value for an ICICI Prudential Whole Life insurance policy will depend on several factors such as your age, gender, occupation, health status, and the amount of coverage you require. To calculate the sum assured value for an ICICI Prudential Whole Life insurance policy, you will need to follow these steps:
- Determine the amount of coverage you need
- Consider your age and gender
- Take into account your health status and occupation
- Choose the policy term
- Use an online calculator
What is Sum Assured in ICICI Prudential Life Insurance?
Sum assured is a fixed sum amount that the ICICI Prudential Life Insurance Company agrees to pay to the insured or the nominee in case an unexpected event happens to an insured or end of the policy term. The sum assured value of ICICI Prudential Life Insurance can be calculated online easily using the Human life value calculator by entering details such as age, income, current, and future expenses estimation, and other details. It will give you an estimation of the sum assured required to cover your family's needs.
How to Calculate Sum Assured in Insurance?
In insurance, the sum assured is the amount that an insurance company agrees to pay in the event of a claim. It is calculated as follows:
Sum Assured = Death Benefit x (1 + Interest Rate)