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Sum assured |
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Sum assuredIn a life assurance policy (for example, whole life assurance or endowment assurance), the sum assured is the minimum amount payable to the assured or his/her dependants on the death of the life assured.Similar MatchesGuaranteed sum assuredGuaranteed sum assuredA term used by some life companies which refers to the minimum sum payable by a life policy either on the death of the life assured or on maturity. AssuredAssuredIn the UK the assured is a person (or people) who has entered into a life assurance contract with a life office and is the policyholder. The person on whose life the policy is taken out is known as the life assured. The assured and the life assured are often the same person but not always. In the USA the expression 'insured' is used. In life insurance, the insured is the person (or people) who has entered into a contract and on whose life the policy is written. On the death of the insured the face amount of the policy passes to the beneficiary. Basic sum assuredBasic sum assuredA term used in conjunction with policies such as low cost endowment assurance and low start endowment assurance.These sorts of policies operate on a 'with profits' basis and often in conjunction with repayment of a loan or mortgage. If the policyholder dies during the term, a guaranteed death benefit repays the loan.However, to guarantee to pay the entire loan at maturity would incur very high premiums. Accordingly, a policy with lower premiums guarantees to repay only a proportion of the loan amount at maturity (the basic sum assured). The expectancy then is that the balance will be repaid out of reversionary and (possibly) terminal bonuses. |
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