Many people who are interested in life insurance and start studying about it may be confused or even have a headache. Because of language used in the insurance industry is quite difficult to understand. Many words are so like each other and make confusion and many people misunderstand that they are the same thing or understand the meaning alternately as well. One of which is the words Sum Insured and Premium. Today, we will learn and understand the meaning and differences of the two words, which are the basic terms that need to be understood before deciding to purchase life insurance.
Sum Insured is
The amount you will receive from life insurance companies In the case of contract maturity or pass away (Depending on the policy conditions)
The amount paid to the life insurance company to purchase coverage by paying in installments May be monthly or yearly. Until the end of the contract (As agreed in the terms of payment of premiums). Normally, insurance premiums will have the same amount every installment until the end of the contract.
For easier understanding, here's an example:
Khun Somying, 40 years old, is insured for life protection with a sum insured of 2 million baht, paying a premium of 45,000 baht per year for 20 years. Somying was in a car crash and died when he was 50 years old.
In this case, Somying's beneficiary will receive sum insured 2 million baht as agreed with the life insurance company. (The death must be in accordance with the terms and conditions specified in the insurance policy)
A simple summary of the sum insured is money (Coverage) that we will receive from life insurance companies. The insurance premium is the money we must pay to life insurance companies. Normally, sum insured, and insurance premiums will vary accordingly. Means that the higher the sum insured, the premiums that we must pay on a monthly or yearly basis are high as well. If we need more coverage (insurance coverage), we must pay more (Insurance premiums) as well.
Insurance is not difficult, gradually study and understand 0r request advice at any SCB branch. Because unexpected events always happen. Insurance will create peace of mind. Regardless of illness, accident, work, lack of income, we also have protection from insurance that allows us to continue to live without interruption. Prepare for every situation by having an insurance that suits your needs today
Thank you for the information from SCBLIFE