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Kathmandu, July 8: Life insurance companies in Nepal are facing a surge in lapsed policies, with over 98,000 surrendered mid-term in the past 11 months.
According to the Nepal Insurance Authority’s (NIA) Insurance Reflection report, policy renewals have dropped sharply, rendering Rs 36.51 billion in policies inactive by mid-June—a 10.54 percent rise from the same period last fiscal year.
This year, 1.24 million policies were not renewed, up 8.77 percent from last year’s 1.14 million. Although the number of surrenders slightly declined, payouts rose by nearly 11 percent to Rs 13.54 billion.
Officials blame weak agent follow-up, limited public awareness, and growing financial hardship for the trend. Most life insurance policies in Nepal run 5 to 15 years and require annual premium payments. Missing payments deactivates coverage unless dues are settled.
Although policies can be revived or surrendered for partial returns after three years, many policyholders remain unaware of these options. Despite NIA’s directive for insurers to stay in regular contact with clients, implementation remains poor.
People’s News Monitoring Service