IB Forms Committee to Study Flat Premium Rate for Term Plan

Kathmandu: The Insurance Board has formed a study committee to resolve the dispute over ‘flat premium rate’ for life insurance. The Board has prohibited all the life insurers to offer flat insurance premium rate amid high risk absorption and low gain.

Earlier, some of the life insurers were allowed to sale term life insurance policies offering flat premium irrespective of the age of the life insured. The Board had favored only a handful of life insurers to sale term plans at flat premium. Later the Board restricted all the life insurers to sale the term plans on flat rate amid the wide criticism from rest of the life insurers.

The Board is again interested to introduce some flexible policy for the sale of micro insurance term plans. The study committee formed under the coordination of Pujan Dhungel Adhikari, director of the Board includes four members.

The members of the committee will be two members from the Life Insurance Association of Nepal and the deputy director of the Insurance Policy Department of the Board. Chairman Nirmal Kaji Shrestha and Vice Chairman Poshak Raj Poudel have been nominated from the Life Insurers Association. The study committee will conduct further study on this subject.

Despite restriction from the regulatory authority, most of the life insurers continue to sale term plans with flat premium rate. They either mention the fake age of the life insured or adjust the additional premium from the agency commission.

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