KATHMANDU, July 7: Life insurance companies in Nepal are seeing a rising number of lapsed policies, with over 98,000 policyholders surrendering their policies mid-term in the past 11 months alone.
According to the Insurance Reflection report published by the Nepal Insurance Authority (NIA), policy renewals have dropped significantly, leaving Rs 36.51 billion worth of life insurance policies inactive as of mid-June. This marks a 10.54 percent increase in lapsed policy value compared to the same period last fiscal year.
Insurance companies are cheating the people, and destroying the...
A total of 1.24 million policies were not renewed this year, compared to 1.14 million last year, an 8.77 percent rise. The surrendered policy count reached 98,041, representing Rs 13.54 billion in payouts, up by nearly 11 percent from last year, despite a slight drop in the number of surrenders.
Officials say poor agent follow-up, lack of policyholder awareness, and rising financial hardship among clients have all contributed to the increase in non-renewals. Most life insurance plans in Nepal span 5 to 15 years and require annual premium payments. Failure to pay on time renders the policy inactive, leaving policyholders without coverage unless they clear outstanding dues.
While there is an option to revive inactive policies or surrender them for partial return after three years, many customers are unaware of these provisions, leading to confusion and loss.
Despite the NIA’s directive to maintain regular communication with clients, insurers and agents have shown limited implementation on the ground.
