Life Insurance Policy Surrenders Reach Rs 11.60 Billion in 10 Months; Over 1.22 Million Policies Not Renewed

Kathmandu — The amount withdrawn from life insurance companies through policy surrenders has exceeded Rs 11.60 billion in the first 10 months of the current fiscal year, according to the latest insurance sector report published by the Nepal Insurance Authority.

Data from the report show that a total of Rs 11.60 billion was paid out through surrendered life insurance policies during the review period.

Despite the large outflow, surrender payments declined by 5.40 percent compared to the same period of the previous fiscal year. During the corresponding period last year, life insurers had paid out Rs 12.27 billion through policy surrender settlements.

The number of policyholders surrendering their insurance plans has also decreased year-on-year. As of mid-May last fiscal year, around 88,635 policyholders had surrendered their policies, whereas the figure dropped to 76,477 during the same period of the current fiscal year. This represents a decline of 13.72 percent in the number of surrendered policies.

However, the amount tied to lapsed policies  (policies that were not renewed) has continued to rise. According to the Authority, the value of non-renewed life insurance policies increased by 6.83 percent year-on-year.

The total amount associated with lapsed policies stood at Rs 39.37 billion during the review period, compared to Rs 36.86 billion in the corresponding period last year.

Meanwhile, the number of lapsed policies declined slightly. A total of 1.224 million insurance policies were not renewed during the first 10 months of the current fiscal year, down 2.39 percent from 1.254 million policies recorded in the same period last year.