ChatGPT said:
Sum Insured is the maximum amount an insurance company will pay if a covered loss happens.
Simple Meaning
Sum Insured = The total financial protection you get from the insurance policy.
It is the limit of how much the insurer will pay.
Example
If your health insurance has a ₹5 lakh sum insured:
- The insurance company will pay up to ₹5 lakh for medical expenses in a year.
- Any amount above ₹5 lakh must be paid by you.
Where the Term Is Used
- Health Insurance
- Motor Insurance
- Home/Property Insurance
- Travel Insurance
(Life insurance usually uses “Sum Assured”, not “Sum Insured.”)
Why Sum Insured Is Important
- It decides your coverage limit
- It affects your premium
- It determines how much claim you can receive
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