Sum assured is a term used in life insurance policies and refers to the guaranteed benefit amount that the insurer will pay to the nominee in the event of the policyholders death during the policy tenure. The sum assured is a fixed amount that is decided at the time of buying the insurance plan and remains unchanged throughout the policy period. It is pre-defined by the policyholder at the time of policy issuance as per their assessment of the future needs of their family. The amount of sum assured is chosen by the policyholder and is based on their income, future expenses, and financial liabilities. The sum assured is an instrumental component of a life insurance plan as it dictates the premiums of the policy. The higher the sum assured, the higher is the premium, thus it is important to choose a sum assured that is affordable and sustainable with current expenses. The sum assured is different from the sum insured, which is generally offered by non-life insurance companies and defines the reimbursement of an insured loss.