What does the term sum assured refer to in insurance?

The term sum assured specifically refers to the guaranteed amount that is payable to the policyholder or their beneficiaries upon the maturity of an insurance policy or in the event that the insured event occurs—such as death in certain types of life insurance. This is a crucial aspect of insurance as it provides the policyholder with the peace of mind that a certain financial benefit is secured as per the terms of the policy.

In life insurance, the sum assured is the amount that the insurer has committed to pay upon the occurrence of the event specified in the policy (like the death of the insured) or at the end of the policy term. This financial guarantee is a key factor for individuals when considering life insurance products, as it helps them plan for potential financial obligations arising from the loss of life.

The other options describe different aspects of insurance but do not define the term sum assured accurately. For instance, some refer specifically to accidental death payouts or the settlement process after a claim which are relevant but not synonymous with the term sum assured. Understanding this definition is fundamental for anyone involved in discussions about insurance policies and their benefits.