Sum assured
The fixed amount a life insurance policy agrees to pay out on a valid claim.
The sum assured is the amount of cover written into a life insurance contract. On a level term policy it stays the same for the whole term; on a decreasing term policy it falls over time, usually in line with a repayment mortgage. Choosing the figure means adding up what the money would need to do — clear debts, replace income, cover specific costs — rather than picking a round number. The sum assured, the term and the premium are linked: more cover and longer terms cost more.
Where this comes up
Guides that use this term
- What is life insurance, and how does it work in the UK?
- How much does life insurance cost in the UK?
- Over-50s life insurance explained: guaranteed acceptance plans
- How much does critical illness cover cost in the UK?
- How much life insurance do I need?
- Term vs whole-of-life insurance: what’s the difference?
- Critical illness cover for children: how it works
- Level vs decreasing term life insurance: what’s the difference?
