What Does ‘Sum Assured’ Mean in a Guaranteed Return Insurance Plan?


Have you been introduced to the guaranteed return insurance plan? A guaranteed return insurance plan is a comprehensive savings plan for people looking for savings and insurance benefits. Unlike the investments in financial instruments such as stocks, derivatives etc., where the returns are market-linked and not assured, the returns in a savings insurance plan are non-market-linked, predefined and assured. It is an insurance product, but there exists a striking difference between the sum assured and the sum insured in such a plan. Let us see how this plan works. 

What is a Guaranteed Return Insurance Plan?

Guaranteed return investments are insurance products that offer insurance and savings solutions based on your financial requirement. Like any other insurance product, it provides a life cover that ensures the death benefit to the nominee in your unexpected death. Additionally, it provides guaranteed returns when the policy matures. As the returns are guaranteed, you can have a definite financial goal in the long term. The plan also offers tax benefits on the premium paid, the maturity benefits, the bonus payouts and the death benefit. 

What are the differences between the sum insured and the sum assured?

The sum insured is the amount payable to the nominee if the policyholder dies during the policy term. It is the life cover decided based on the premium amount and the policy term. The calculation of the sum insured will be based on your health condition and the associated death risks. 

Like any other life insurance plan, you can extend the benefits of the sum insured by availing of add-on riders benefits such as the critical illness rider, total and permanent disability rider, accidental death benefit rider etc. 

On the other hand, the sum assured means the guaranteed returns assured by the policy during the policy inception, which becomes payable only when the policy matures. 

The plan offers different payout options for the maturity benefit or the sum assured in the guaranteed return plan:

  1. As a lump sum amount: It can be used to pay for your child’s education or marriage.
  2. As a combination of lump sum and guaranteed annual income: Using this payout option, you can pay off debts and a regular income post-retirement. 
  3. As a regular monthly income: It is an ideal income post-retirement. You can plan for the exact amount considering your lifestyle and the inflation rate during the policy inception. The regular income is assured, provided you pay the premium amount regularly as per the policy terms and conditions.  

For the guaranteed annual income and the regular income option, you can decide on the income period for which you would like to receive the sum assured. It can be for a predefined period or whole life until death. 

The guaranteed returns or the sum assured in India in a guaranteed return plan is calculated differently based on the individual policies of the insurers. TATA AIA insurance provides different plans with variable benefits and flexible options. 


Life insurance with guaranteed returns will be a complete solution for all your financial needs. It will ensure your family financial security and contribute towards your long-term financial goals simultaneously. In addition, the guaranteed return insurance plan offers flexible options for the premium payment and the maturity payout features. So, plan your finances well, save adequately and get insured at the same time!