KATHMANDU, May 12: A total of 7,712 insured individuals surrendered their life insurance policies in the first nine months of the current fiscal year.
According to the record of the Insurance Board (IB), the aforementioned numbers of life insurance policies issued by 19 life insurers, worth Rs 1.66 billion, were canceled during mid-July 2021 and mid-April 2022. Over the period, Nepal Life Insurance had to revoke 2,755 insurance policies, the largest number. The surrendered insurance amount of the company was Rs 457.42 million.
Rastriya Beema Sansthan, which witnessed cancellation of 1,956 units of policies, stood second in the row. The state-owned insurer lost its business worth Rs 97.27 million from the cancellation of the policies it had issued.
In most of the cases, the insured surrenders a life insurance policy to get rid of the burden of the premium amount to be paid to the insurers. An increase in the surrender rate this year could be due to an increased financial burden to the insured caused by increased interest rates of banks and soaring consumer prices, said analysts.
The IB has allowed the insured to surrender the policy only after two years of being insured. After a policy is surrendered, the insurance companies discount their commission amount and pay back the rest of the premium amounts deposited over the given time to the insured.