Why the large number of insurance policies surrenders increased in Nepal

Jan Wed 2023 05:16:03


Why the large number of insurance policies surrenders increased in Nepal

The impact of the financial crisis was seen in the insurance sector

Kathmandu. A proof of how the impact of economic recession is reaching the level of common people is confirmed by the data of insurance policy surrenderers. This conclusion was drawn after seeing that the number of surrenderers increased in the month of November compared to the month of October, but the amount surrendered decreased.

According to the Insurance Authority, most insurance policies of Nepal Life Insurance have been surrendered in the month of November. During this period, 2 thousand 472 insurance policies worth Rs 33 crore 1 lakh 98 thousand of the said company have been surrendered.

Similarly, 762 insurance policies worth 79.7 million 59 thousand rupees of the National Insurance Company have been surrendered. During the same period, 710 insurance policies worth 118.6 million 24 thousand rupees of National Life Insurance and 572 insurance policies worth 18 million 85 million 19 thousand rupees of Life Insurance Corporation have been surrendered.

According to the authority, in November, the insureds of Met Life have surrendered 287 insurance policies worth 25 million 19 thousand rupees. Similarly, during this period, 483 insurance policies worth 30 million 2851 thousand rupees of Asian Life Insurance Company have been surrendered.

Similarly, in the month of November of the current financial year, 186 insurance policies worth Rs. During the same period, 179 insurance policies of Surya Life Insurance Company worth Rs. 21.5 million and 1453 insurance policies of Prime Life Insurance 1 thousand 453 worth 82.23 million 84 thousand rupees have been surrendered.

According to the authority, during this period, 41 insurance policies of IME Life Insurance worth 37 lakh 67 thousand rupees, 48 insurance policies of Union Life worth 377 lakh 30 thousand rupees, 87 insurance policies of 1 crore 39 lakh 71 thousand rupees of Jyoti Life and 37 lakh 46 thousand of Sun Nepal Life Insurance. 

Similarly, in the month of November, 104 insurance policies of Reliable Nepal Life Insurance worth Rs 50 lakh 76 thousand have been surrendered. During this period, 71 insurance policies of Citizen Life Insurance worth 43 lakh 18 thousand rupees and 36 lakh 96 thousand insurance policies of Sanima Life Insurance have been surrendered, according to the data of the Insurance Authority.

According to the authority, during this period, 38 insurance policies worth 64 lakh 10 thousand rupees of Prabhu Life Insurance Company have been surrendered, while 27 insurance policies worth 34 lakh 71 thousand rupees have been surrendered of Mahalakshmi Life Insurance Company.

Analyzing the data, it is easy to see that the insured have reached the point of having to surrender even small amounts of insurance. This is why it is happening. The economic crisis is deepening to the level of common people.

Generally, people who take insurance have a regular source of income. When there is uncertainty in the regular income stream, people cut back on areas of investment that can be reduced. In our society, insurance is one of those sectors.

Surrendering the policy in the middle of not being able to pay the regular premium causes a huge financial loss to the insured. The fact that the insureds are ready to bear such losses and reach the decision of insurance surrender indicates that they are in real trouble financially.