Glossary
Sum assured
The sum assured is the guaranteed amount a life insurer agrees to pay when the insured event happens, such as death or the maturity of the policy.
Sum assured explained
The sum assured is the headline figure on a life policy. It is agreed when the policy is taken out and is the basis for calculating the premium. For example, a policy with a sum assured of K100,000 pays that amount to the beneficiaries if the life assured dies while the policy is in force.
Some policies pay more than the sum assured, for example endowment or with-profits policies that add bonuses over time, and some pay less if the policy has been made paid-up or has outstanding policy loans. The policy terms explain what is added or deducted.
Why it matters in life insurance
The sum assured drives premiums, reserves, reinsurance and claims payments, so it must be recorded correctly on every policy. Ontech LifeI ERP holds the sum assured on each policy and its endorsements, and uses it for quotations, actuarial reserving and claim settlement.