Kathmandu: Life insurers are reluctant to accept policy surrender proposal amid surge in the number of policy surrender since last few months.
Earlier, Surya Prasad Silwal, Chairman of the Insurance Board has asked to the Chief Executive Officers of all life insurers to control the policy surrender at any cost. Following his instruction, some of the life insurers are trying to avoid the surrender proposal as far as possible.
Following the unnecessary sufferings to get the surrender value, the policyholders have made complaints for delayed acceptance of surrender application and payment of surrender value.
According to the Life Insurance Policy Directives 2078, issued on 23rd Asar 2078, an endowment policy is eligible to receive the surrender value after completion of 3 years from the date of commencement. There is a provision that the policyholder can surrender the policy at any time once its eligible for surrender value. Due to the lack of liquidity in the financial market, there is no other option, so the policyholders are forced to discontinue their policy after receiving surrender value.
After assessment of the policyholder’s need, we have honestly forwarded their proposal to the corporate office for final nod, A branch manager of life insurance company says, But employees from head office start making many excuses to pay the surrender value.
Life insurance is a valid contract between the insurance company and the life assured or policyholder. It is the duty of both the insured and the insurer to abide by its terms and conditions. In case of violation, the insurance company has the right to deprive the insured from the benefits of the policy. In case of violation by the insurance company, the policyholder has the right to seek remedy with the help of the Insurance Board or move to the Court.
The condition written in the insurance policy is clear, the insured must get the surrender value immediately after the completion of 3 years, said an Agent, but now a lot of hassles has been created which is not good for the life insurance business.