Life insurers continue to face flooding of policy surrender

Kathmandu: Life insurers continue to face flooding of the untimely termination of insurance policies. Policyholders have withdrawn a total of NPR 1.03 billion against surrender value in the month of Jestha 2080 alone.

According to the Nepal Insurance Authority, the money withdrawn by the policyholders in the Month of Jestha accounts for 39.31 percent of the new business income in the same month. Life insurers collected a total of NPR 2.62 billion from new business. The share of surrender value withdrawn in the previous month accounted for 50 percent of new business income for the same month.

The recent saturation in the credit flow of the financial institutions forced people to seek alternatives for cash arrangements which resulted in the policy surrender.

State-owned life insurer, Rastriya Beema Sansthan faced the highest volume of surrender compared to its income from new business generation. It has paid a total of NPR 124.6 million against surrender value while collecting only NPR 47.9 million in the month of Jestha of the current financial year 2079/80.

Nepal Life Insurance paid NPR 433.9 million which accounts for 67.4 percent of its new business in the review period. LIC Nepal paid NPR 138.8 million during the same month against surrender. It accounts for LIC 78.60 percent of its new business insurance premium income of Jestha.

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