The sum assured can be less than the death benefit

There is difference between sum-assured and death benefit in life insurance. An important factor that decides the premium of your life insurance policy is the sum assured. Sum assured is the money that the insurer pays in case the insured event takes place. So, in the case of a term policy on death of the policyholder, the beneficiary gets the sum assured. Under a term policy there is no difference between the death benefit and the sum assured. But in the case of insurance cum investment plans, the sum assured may not be the same as death benefit. It could even be higher or lower than the death benefit. That’s because the rules define the minimum level of death benefit. So some plans—read traditional plans—that peg the maturity benefit to the sum assured may offer a corpus that’s lower than the death benefit.

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