Payment made to the insured by the insurer outside its legal obligation is?

Ex gratia payment is payment made to the insured by the insurer outside its legal obligation. In other words, it is a payment made voluntarily by the insurer as a gesture of goodwill or sympathy, rather than as a result of a contractual obligation or legal liability. This payment is not part of the sum assured or the surrender value, but it is an additional payment made by the insurer to the insured. It is usually made in situations where the insurer wants to compensate the insured for a loss that is not covered under the insurance policy or to reward the insured for good behaviour.