The need for compulsory life insurance?

Poshakraj Paudel 25 Jan 2080

In general terms, insurance is a tool to protect someone when there is a risk. Only the insurance company looks at it when something is difficult. Insurance for that. On the other hand, life insurance is viewed as two parts, compulsory savings and investment. Some have understood it as savings and some have understood it as investment. In fact, this is the saving of risk protection. There can be various other areas for investment. Therefore, rather than investment, life insurance is a bundled product for mandatory savings and risk.

As it develops, it is a matter of protecting the family’s risk, reducing the risk in terms of financial future. Looking at it broadly, during the development of society, people start to become more professional and more self-centered.

When that person is in trouble, rather than friends and society helping them, insurance is considered as a concept of self-management of problems. Today, even if the person you know fixes things, there are fewer and fewer people who help with medical expenses or other necessary expenses when they need it.

That’s why, when something happens to someone, the life insurance companies are the organizations that take care of the treatment expenses and raise the support amount according to the product. Therefore, in the course of development, insurance is now seen as an era in which a tool to protect against risks was invented in economic terms.

History of InsuranceA decade ago, the insurance sector was very narrow and limited. This sector, which was around 7 percent during the last four decades, has reached 40 percent in the last decade. In the last decade, there has been a significant increase in all aspects of the insurance sector, and the number of new companies has increased significantly. Insurance education and literacy have also increased. The discussion about insurance has started at the lower level.

Now there is a positive understanding about insurance from village to village. Government health insurance plays an even more important role. Because insurance is compulsory when going for foreign employment, the awareness of insurance has reached households. People who go abroad should be aware of the fact that various incidents occur and the insurance company provides facilities for that.Likewise, Corona insurance also seems to have spread the awareness about insurance to villages.

For this, the companies have already given four/five thousand years. Due to all these things, the level of public awareness about insurance is increasing gradually. In a way, the basis for positive things about insurance has been set. It is clear that this decade has become a historical one for the insurance sector.

Requirement of insurance liability:As a matter of practice, it takes time to explain good things to people. Some new initiatives should also be taken in the society for good work. Some things need to be explained. If we look at the world itself, it is very difficult to advance good things, and people have to cut corners in some cases. Accordingly, agents are explaining about insurance as a tool for protection. After understanding, they will start to be confident about themselves.As an example, when the level of consciousness of people in Nepal has not been developed, school teachers and activists used to say that they should go door to door and enroll children in school and teach them. Gradually the common people understood this. Currently, Nepal’s literacy rate is very good. Now there is no need to keep asking children to go to school. In the same way, the issue of insurance seems to be improving gradually.

Quality and Literacy:Currently, 12,000 employees are involved in this sector. 2.5 lakh agents are actively working. In recent times, employees who are able to immerse themselves in technology have come to the insurance sector. They also seem digital friendly. In some cases, there may be a need to increase the knowledge and technology of insurance.There is more homework to be learned and taught. It seems that if competent employees are produced, it will greatly help the insurance sector.

On the other hand, there is a need to increase the professionalism of the agents. To make this profession worthy, training and capacity development work must be done. Recently, the regulatory body Insurance Authority has worked to increase the capacity of agents. The regulator has paid more attention to quality. Similarly, insurance companies have been emphasizing on quality rather than quantity.While digital marketing including telemarketing has not been developed in Nepal, there is a need to pay attention to this.

Necessary development of the coordination of police, administration, local government and hospital for timely payment has not been done yet. There is an urgent need to improve it. If the system of quick payment is developed, the insurers will become more active.The main thing is that in the field of insurance, there is a greater need to explain to people. Lately, the association has been doing awareness work in various ways. The association is working in collaboration with the media. It is our understanding that if it is propagated through communication, it can give a positive message in a wide area. The work is being done to reach the common people by regularly presenting interviews and analysis in various media.

In coordination with the Regulatory Insurance Authority, discussions and interactions are going on with the local governments. The authority has separated the district for this. Accordingly, awareness programs are being held every month by reaching different municipalities. Gradually people have started to understand.Now, the buyer of the insurance product should first of all know what he is buying before buying it. The most important issue is what are the standards and conditions set for you in that product.

According to what the insurance provider has said, one should know whether there is a provision in that product. Everything said by the insurance provider and written in the contract paper should be checked whether it is correct or not.Just like when a person buys a mobile phone, he understands everything in detail, similarly when buying an insurance policy, I urge everyone to understand it. Life insurance has many benefits. It should be clear whether the insurance is for yourself, for children or for medicine or for old age.

All the features of the insurance are mentioned there.Laws, Laws A new law on insurance is about to be implemented here. There is a functional problem due to the absence of regulations after the Act. It seems that if the regulation comes soon and the content is clear, it will be easier to work. The new law covers many subjects.

Risk reduction issuesEveryone should understand that peace of mind is insurance. Insurance makes the family feel happy that they will not have financial problems even if they are not there. When you get sick, it may be difficult to raise the expenses for medication. A person can get disease at any time. Accidents can happen anytime anywhere. No one can see in old age.Or many such difficulties may come. At that time, even friends or relatives may not be able to help.

Therefore, insurance is for all kinds of risk reduction. If you live your life with peace of mind and live your life with confidence, everyone can come under insurance and remove the uncertainty that may occur in the future. The government did not understand insuranceRecently, the words of insurance have been included in the budget, but it seems that implementation is still not prioritized. The government has started realizing that insurance is needed. In the same way, the government has begun to understand the issue that the country has to suffer due to the lack of insurance, but the priority of implementation is limited to speech. For example, even though it is known that the development budget should be done, but there is no expenditure, the insurance sector is also going through the same situation.

Future of insurance business and steps to be takenNow a very large population is not covered by insurance. In a country like ours, the government’s social security measures are not strong. Until now, in old age, he has to solve all his problems by himself. In the same way, there is no certainty whether the child will be raised or not. Therefore, it seems that you have to make separate arrangements for your old age. Pension products for old age, separate products for treatment and in a country like ours where there is no security function of the government, its potential is wide. In developed countries, one person buys 6/7 products. In those countries, there is a culture of buying different products including medical expenses, accidents, old age, children’s future, social work.

We have a tradition that once a product is purchased, it is complete. Therefore, it seems that the tradition of trading products according to the needs of the individual must be established. Insurance products are still being sold to individuals. Insurance should be voluntary instead of being sold. In developed countries, it is common for people to buy insurance on their own. Therefore, it is possible only if the social environment changes to get insurance by self-realization. In developed countries, there is a tendency to arrange and insure for oneself that no one else is watching.Here, people come looking for themselves after fear is created.

There is a mentality that if there is something difficult or difficult, I will go to the village and sell one or two parcels of land to survive. Now it’s time for people to realize that if something hurts me, the insurance company will help me. You should come out of the trend of selling your distressed property tomorrow and understand that there is an insurance product for that. In general, information and giving information should be improved. It is necessary to teach about insurance like other subjects from the school level to make people realize that awareness is necessary.

Then people will talk about its importance. In an economy like ours, up to 25 percent of the people are below the poverty line, they should be made to understand that people who can earn financially, if they are unable to earn for any reason, insurance will save them. Increasing literacy everywhere is the most important aspect.

(Paudel is the President of Life Insurance Association of Nepal and CEO of Citizen Life. The published material is taken from Iman Journal 2080.)