KATHMANDU, May 12: A total of 7,712 policyholders redeemed their life insurance policies during the first nine months of the current fiscal year.
According to the Insurance Board (IB) filing, the above numbers of life insurance policies issued by 19 life insurers worth Rs 1.66 billion were canceled in mid-July 2021 and mid-April 2022. During the period, Nepal Life Insurance had to revoke 2,755 insurance policies, the highest number. The insurance amount redeemed from the company was Rs 457.42 million.
Rastriya Beema Sansthan, who witnessed the cancellation of 1,956 units of fonts, ranked second in the row. The public insurer lost its business worth Rs 97.27 million following the cancellation of the policies it had issued.
In most cases, the insured buys out a life insurance policy to get rid of the burden of the premium amount to be paid to insurers. An increase in the surrender rate this year could be due to an increased financial burden on policyholders caused by rising bank interest rates and soaring consumer prices, analysts said.
The IB only allowed the insured to surrender the policy after two years of insurance. After a policy is surrendered, insurance companies discount their commission amount and refund the rest of the premium amounts deposited during the given period to the insured.