Aditya Birla Sun Life Insurance Company Limited

Decreasing Sum Assured

4.5
Rated by 1 readers

Definition:

Decreasing sum assured is a feature under the term plan in which the sum assured decreases every year by a percentage.

Description:

Decreasing the sum assured under the term insurance plan is a feature which is accepted by the insured to pay off their loan liabilities. The sum assured under the term plan indicates the amount of loan taken and the interest applicable. The premium under the decreasing sum assured term plan is lesser than the normal term plan. Decreasing sum assured term plans are used to pay off debts and loans. As the loan instalments are paid every year, the outstanding balance of loan reduces. This outstanding balance indicates a decreasing sum assured balance.

Example:

Amit purchased a term plan for 20 years with a decreasing sum assured Rs.20 lakhs. At the end of the policy year, the sum assured will decrease by 5%. At the end of the first policy year, the sum assured will be Rs.19 lakhs and so on. If after paying the premium for 6 years, Amit died, the reduced sum assured will be paid to the family dependents. It is because Amit had chosen a decreasing sum assured under the policy.

How much helpful you found for you?

4.5
Rated by 1 readers
0 / 5 ( 0 reviews )
Not helpful
Somewhat helpful
Helpful
Good
Best
Don’t forget to share helpful information in your circle

Thank you for your details. We will reach out shortly.

Thanks for reaching out. Currently we are facing some issue.

Buy ₹1 Crore Term Insurance at Just ₹508/month*

Please enter a valid First Name.
+91Icon Phone
Please enter a valid Mobile Number.
*This field is required.
Plan Logo

ABSLI Salaried Term Plan

Exclusively For Salaried Individuals

Icon-Illustration Insurance

4 Plan Options

Icon-Whole life cover

Life Cover upto 70 years

ICON-CLICK

Optional Accelerated Critical Illness benefit

ICON-CLICK

Inbuilt Terminal Illness Benefit

Life Cover
₹1 crore

Premium:
₹508/month*

Recently Added Article

ABSLI Salaried Term Plan (UIN:109N141V02) is a non-linked non-participating individual pure risk premium life insurance plan; upon Policyholder’s selection of Plan Option 2 (Life Cover with ROP) this product shall be a non-linked non-participating individual savings life insurance plan.
*LI Age 21, Male, Non Smoker, Option 1: Life Cover, PPT: Regular Pay, SA: ₹ 1 Cr., PT: 10 years, Annual Premium: ₹ 6100/- ( which is ₹ 508.33/month) Premium exclusive of GST. On death, 1 Cr SA is paid and the policy terminates.
ADV/5/22-23/289