Definition
The sum insured is the dollar amount your beneficiaries receive when a valid claim is paid. On a life policy it is the death benefit; on a trauma or TPD policy it is the lump sum paid on diagnosis or disability. You choose the sum insured at policy start; some policies index it to inflation, others stay flat over the term.
See also
- Indexation — Annual increase in your sum insured (and premium) to keep cover in line with inflation.
- Cover term — The length of time cover stays in force — either a fixed term, or to a defined age, or whole-of-life.
- Death benefit — The lump sum paid by a life policy when the insured dies (subject to wording and exclusions).
Not personalised financial advice. Definitions are editorial framings of how the term is used across NZ life cover. Your specific policy wording is the authoritative source.