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The sum assured is the guaranteed amount paid to the nominees upon the policyholder’s death, and the maturity amount is the sum provided to the policyholder at the end of the life insurance policy term.
On top of accumulating funds to accomplish your future financial goals, life insurance plans help secure funds for your family in your absence. That is why it is important to understand life insurance plans and their essential components like the sum assured and maturity amount.
Two important life insurance concepts often used interchangeably are sum assured and maturity benefits. These are two completely different concepts, and understanding the difference between sum assured and maturity benefit is crucial to making well-informed financial decisions.
What Is Sum Assured?
The sum assured in a life insurance policy is the guaranteed3 amount your insurer will provide to your nominee in case of your unexpected demise during the policy period. It is a pre-fixed death payout called the life cover and decided during policy inception.
The sum assured can include the benefit provided on add-on rider2 as well as the guaranteed3 financial benefit provided at policy maturity. For instance, in a savings insurance plan, apart from the life cover, the life insurance policy also provides a guaranteed3 maturity benefit, and since it is guaranteed3, it is a sum assured on maturity.
What Is The Maturity Amount?
The maturity amount in a life insurance policy is the amount provided to you by your insurer at the end of the policy tenure. It is a financial benefit provided when you outlive the life insurance policy period.
To avail of the life insurance maturity amount, you must pay the premiums regularly throughout the policy period and complete the tenure.
Difference Between Sum Assured And Maturity Benefit
Parameters |
Sum Assured |
Maturity Benefit |
Type of benefit |
The sum assured is the guaranteed3 and decided amount during policy inception. |
The benefit is generally not exactly guaranteed3, but a portion of it can be, such as in the savings insurance plans. In such cases, the sum assured on maturity is decided during the policy inception. |
Benefit Objective |
The sum assured death benefit is a financial shield to secure your family in your absence. |
It helps you accumulate funds for your savings and investment objectives to accomplish your future financial goals. |
Beneficiaries |
Nominees can receive the death payout and benefit from your life insurance coverage, and you can receive the sum assured on maturity if you are the policyholder. |
If you are the policyholder, the insurer will pay the maturity benefit to you directly at the end of the life insurance policy period. |
Time of payment |
It is paid to your nominee at any time during the policy tenure when you meet with an unexpected death. |
It is only paid upon reaching the end of the policy tenure. |
Factors applicable |
The sum assured death benefit is determined primarily based on the premium amount. |
The maturity amount is based on the premium, policy period, interests earned, type of fund options chosen for the policies, etc. |
Applicability |
It applies to all life insurance policies. |
It does not apply to term insurance policies unless you have opted for the term insurance with the return of premium1 benefit. |
Difference Between The Claim Processes For The Sum Assured And Maturity Benefit
After understanding the difference between the sum assured and the maturity amount, it is vital to know the claim processes that distinguish them to avail of the benefits timely.
The process to register for the death claim or apply for the maturity benefits can be accessed online or offline.
Important documents required for the sum assured death benefit and the maturity benefit:
Sum Assured Death Benefit |
Maturity Benefit |
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At Tata AIA Life Insurance, we follow a seamless claim settlement process to ensure that the sum assured and maturity benefits reach our policyholders timely.
Wrapping Up
While purchasing a life insurance policy, it is crucial to understand the difference between sum assured and maturity benefit. While the former secures funds for your family’s financial future in the event of your unexpected demise, the latter helps you accumulate funds to accomplish your future money goals. No matter which plan you choose, make sure you do proper research because informed financial decisions today can pave for a brighter tomorrow.
