Sum insured in health insurance refers to the maximum amount your insurance company will pay for your medical expenses in a policy year. It acts as a coverage limit for hospitalization, surgeries, treatments, and other healthcare costs, depending on your policy terms.
For example, if your policy has a sum insured of ₹5 lakhs, the insurer will cover eligible medical expenses up to ₹5 lakhs in that policy year. Any cost beyond that will have to be paid by you out of pocket.
It’s important to choose a sum insured that aligns with rising medical costs, family size (if it’s a floater plan), and your location (urban areas tend to have higher medical charges).