Simplifying Life Insurance in India
Difference Between Sum Assured and Maturity Amount
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What is Sum Assured?
What is the Maturity Amount?
Sum Assured Vs. Maturity Amount
| Parameter | Sum Assured | Maturity Amount |
| Definition | Sum assured amount is a component of an insurance plan that gives life cover. Customers get an assurance that in case of their premature demise, their families can get this fixed amount and maintain their regular expenses without difficulty. | The maturity amount gives individuals a fixed sum of money after their policy term ends. Policyholders can use this benefit as their savings for future expenses. |
| Beneficiary | Only nominees can get this amount in their savings account after the policyholder’s premature death. | The insurance companies pay the maturity value to policyholders directly. |
| Availability | The benefit of sum assured comes with term, life and health insurance policies. | Policyholders can get maturity amounts only with life insurance plans. Term or health insurance policies do not offer this maturity benefit. |
| Bonuses | Sum assured amount does not include any bonus. | Maturity value can include bonuses, as mentioned in the policy terms. |
After knowing the differences between sum assured and maturity value, you also need to know about the claim processes for both.
Claim Process for Maturity Benefit
Generally, insurance companies send a policy discharge form to their customers one month prior to the date of maturity. It contains everything that they need to follow to claim the maturity benefit. You need to submit it on due time after completing some formalities.
The policy discharge form requires your signature as well as that of two witnesses during submission. Along with this, you need to attach several documents like copies of identity proof documents, address proof documents, bank details, etc. After you send all these papers, your insurance company will carefully examine them for verification. They will send your maturity benefit to your account upon completing the process.
Claim Process for Sum Assured
Nominees need to inform the concerned insurance company about the insured individual’s untimely demise. Then, they will have to either apply online, or collect an offline application form for death benefit from any branch of that insurance company if online facility is unavailable.
Nominees will have to provide all the necessary documents, including their address and photo ID proof, the insured individual’s death certificate, etc., along with the duly filled-in application form. After this, the insurer will go through all records and disburse the sum assured amount upon verification.
After knowing the difference between sum assured and maturity amount, you can now clearly understand the unique importance of these two types of policy benefits. You can see maturity benefits as an alternative to your savings. On the other hand, sum assured can help your family to sail through their lives in case of your unfortunate demise.
FAQs about Sum Assured and Maturity Amount
Which documents do I need to submit to claim the maturity benefit?
Following are some of the documents that you need to submit to claim the sum assured amount from an insurance company:
1. Medical records and death certificate of the insured individual
2. Bank account details of the nominee
3. Original policy papers
4. Residential and photo-identity proof of nominees
Are sum assured and death benefits the same?
What is a sum insured?
Does a beneficiary need to pay any tax on the death benefit?
Important Guides related to Life Insurance
Disclaimer
- This is an informative article provided on 'as is' basis for awareness purpose only and not intended as a professional advice. The content of the article is derived from various open sources across the Internet. Digit Life Insurance is not promoting or recommending any aspect in the article or its correctness. Please verify the information and your requirement before taking any decisions.
- All the figures reflected in the article are for illustrative purposes. The premium for Coverage that one buys depends on various factors including customer requirements, eligibility, age, demography, insurance provider, product, coverage amount, term and other factors
- Tax Benefits, if applicable depend on the Tax Regime opted by the individual and the applicable tax provision. Please consult your Tax consultant before making any decision.
