Have you ever seen the words 'Basic Sum Insured’ on your health insurance policy and wondered what exactly it means and if it is different from ‘Sum Insured’? Many people assume it's the same as the sum insured, but there's more to it than meets the eye. Just one word makes all the difference. Let's take a look at what sets them apart.
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Basic Sum Insured in health insurance is the maximum fixed amount of money that your insurer will pay for your medical expenses during the policy period. It is the core coverage amount you choose when buying the policy and it serves as the foundation or base for claim settlements, hence the term 'Basic sum insured'. Simply put, it is guaranteed coverage without any bonuses or add-ons.
If your base or basic sum insured is ₹3 lakhs, that is the guaranteed amount your insurance will cover. This excludes any extra benefits or add-ons unless stated otherwise. For example, your policy states ₹3 lakhs basic sum insured and offers a no-claim bonus of ₹1 lakh, your total sum insured could become ₹4 lakhs. So, we can say that:
Basic sum insured = ₹3 lakhs
Sum insured = ₹4 lakhs
Sum insured is the total amount you're covered for, which includes bonuses, for example, no-claim bonus. Whereas the Basic sum insured is the original and fixed amount without any add-ons or extra features. Here’s an easy explanation of the comparison between the two:
| Basic Sum Insured | Sum Insured | |
| Meaning | It is the fixed amount of coverage chosen when buying the policy | It is the total coverage amount of base amount plus add-ons |
| Add-ons | Does not include add-ons | Includes add-ons & bonuses like no-claim bonus |
| Premium | Premium is based on this amount | Premium is based on base amount and add-ons |
| Visibility | Mentioned in the policy as ‘Basic’ or ‘Base’ Sum Insured | Mentioned in the policy as ‘Total Sum Insured’ or just ‘Sum Insured’ |
| Restoration | Kicks in only after basic sum insured is exhausted | Adds to the total sum insured for any future claims |
Meet Priya, a 30-year-old working professional who has a health insurance policy with:
Year 1 - No claims made
Priya does not use her insurance this year so when she goes to renew her policy:
Year 2 – Priya falls ill
She unfortunately gets hospitalised and files a claim of ₹5.5 lakhs. Now, here’s what happens:
*Please note that restoration benefits rules may vary, and some plans require separate hospitalization or unrelated illnesses for it to be effective.
Key takeaways from this example
Basic Sum Insured is the maximum amount that your health insurance provider will cover without any of the add-ons or bonuses. While Basic Sum Insured and Sum Insured may seem like the same thing, understanding that tiny but crucial difference between the two can help you make better decisions about your health insurance policy for you and your loved ones. Always review your policy documents carefully to understand exactly how much of your coverage is guaranteed and how much is conditional on bonuses or additional features.
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Reviewed by Dr. Harshita Dahiya 
Acko Technology & Services Private Limited
#36/5, Hustlehub One East, Somasandrapalya, 27th Main Rd, Sector 2, HSR Layout, Bengaluru, Karnataka 560102
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