Kathmandu: Finally, Beema Samiti has withdrawn the clause of policy cancellation within 30 days of issuance. The newly launched ‘Life Insurance Policy Directive 2078’ has the provision of giving option to the insured to cancel the policy within 30 days of policy issuance.
Such provision was widely criticized by the insurers on the ground that it will encourage ill practice among insurers and promoter money laundering in the insurance industry.
Article 21 of the directive stipulates that “for all types of insurance policies issued by the insurer, a period of 30 days shall be provided for the return of the policy and that period shall come into force from the date of issue of the policy.”
Similarly, in sub-section 2, “If the insured / policyholder requests in writing to return the policy within the period as per sub-section one, in case no claim is received under the policy, the insurer will have to cancel the policy by refunding the entire premium amount taken for the policy.”
In subsection 3, “When the insurer returns the premium as per subsection 2, the cost of medical underwriting, the proportional premium amount and ticket fee may be deducted from the date of issuance of the policy to the date of request for return of the policy.”
The committee has removed the provision as it would create distortion and create trouble in the future. And on the other hand black money can be used for numbers of policy issuance of lower sum assred and later it will be cancelled to legalize the black money.