Kathmandu. More than 11 billion rupees worth of policies have been surrendered in the ten months of the current financial year, i.e. till the end of Baisakh. This is seen in the latest statistics released by the Nepal Insurance Authority.
It has been seen that the number of people abandoning insurance policies has increased a lot in recent times. According to statistics, 82 thousand 648 policies worth 11 billion 34 crore 46 lakh 93 thousand rupees have been surrendered since last July.
According to Praveen Raman Parajuli, Vice President of Life Insurance Association and Chief Executive Officer (CEO) of Nepal Life Insurance, the number of people abandoning insurance policies has increased due to the economic recession in the country.
He says, "Recently, the number of insured people abandoning insurance policies has increased. The country's economic recession that has been seen for some time is also the main reason for surrendering the policy. It seems that the ability of the insured to continue the policy has decreased. Insurance is not only risk bearing but also saving. People get insurance only when they are financially comfortable. As the sources of income are decreasing and the pressure of money is increasing, people have started surrendering the policy.
As the number of people abandoning the insurance policy increased recently, the Nepal Insurance Authority also implemented a new system. The Authority issued the Life Insurance Policy Directive, 2078 and implemented a new provision in surrendering the insurance policy. According to the new arrangement of the committee, the insured cannot surrender the policy for 3 years.
Earlier, the insured could surrender his policy after 1 year of purchasing the policy. As the number of surrenderers increased, the authority implemented a new system. The authority believed that the process of abandoning the policy would stop with the implementation of the new system. However, despite the implementation of the new system by the authority, it has been found that the number of surrenderers is increasing.
According to Parajuli, the vice president of the association, some policies have been surrendered within the time set by the authority, while some policies have been surrendered even after a long period of time. He said that after being hit by the recession, insurance was given a lower priority by prioritizing other financial needs.
Over insurance is another reason for the increase in insurance policy surrender. According to insurance experts, the policy is surrendered without paying the premium because the agent has insured more than the capacity of the insured.