Sum insured is the cap on claims for a person (or, in a floater, a family) in one policy year. Once it's exhausted, further bills are out of pocket until renewal - unless a top-up, corporate buffer or restoration/recharge kicks in. Choosing the SI is the central design trade-off: higher SI = more protection but higher premium.
In India
Typical corporate SI ranges from ₹2–10 lakh per family. Given rising Indian hospitalisation costs, ₹3 lakh is increasingly seen as thin for metro treatment; many employers add a super top-up to lift effective cover cheaply.
In practice
A family floater with ₹5 lakh SI. Father's bypass surgery costs ₹4.2 lakh. Later the child needs ₹1.1 lakh of treatment - but only ₹0.8 lakh SI remains, so ₹30,000 is out of pocket unless a restoration benefit refills it.