Basic sum assured - A term used in conjunction with policies such as low cost endowment assurance and low start endowment assurance.These sorts of policies operate on a "with profits" basis and often in conjunction with repayment of a loan or mortgage. If the policyholder dies during the term, a guaranteed death benefit repays the loan.However, to guarantee to pay the entire loan at maturity would incur very high premiums. Accordingly, a policy with lower premiums guarantees to repay only a proportion of the loan amount at maturity (the basic sum assured). The expectancy then is that the balance will be repaid out of reversionary and (possibly) terminal bonuses.
Basic sum assured : a term used in conjunction with policies such as low cost endowment assurance and low start endowment assurance.these sorts of policies operate on a "with profits" basis and often in conjunction with repayment of a loan or mortgage. if the policyholder dies during the term, a guaranteed death benefit repays the loan.however, to guarantee to pay the entire loan at maturity would incur very high premiums. accordingly, a policy with lower premiums guarantees to repay only a proportion of the loan amount at maturity (the basic sum assured). the expectancy then is that the balance will be repaid out of reversionary and (possibly) terminal bonuses.
Basic sum assured