April 10: The number of policyholders surrendering their insurance policies is on a rise in Nepal. Due to the increase in the number of policy surrenders, the life insurance companies had to refund nearly Rs 9 billion in insurance fees in just eight months of the current fiscal year.

According to the Nepal Insurance Authority, the insurance companies have returned more than Rs 5.85 billion from mid-July to mid-March of the current fiscal year after the insured surrendered their policy.

As per the authority, the highest number of policies was surrendered from mid-July to mid-August, withdrawing more than Rs 1.51 billion from the insurance companies.

Similarly, from mid-February to mid-March, insurance companies returned more than Rs 1 billion in insurance fee through policy surrender of 8,939 policies, according to the data released by the authority.

During the review period, the highest amount of insurance fee was returned by Nepal Life Insurance Company worth Rs 342 million. In the second place, it is Life Insurance Corporation (Nepal) Limited returned Rs 157.3 million. In the third place was National Insurance Institute, which returned Rs 144.1 million due to surrender of insurance fee.

Suresh Prasad Khatri, Chief Executive Officer of National Life Insurance Company, says that policy surrender has increased now than in the past due to the direct impact of economic slowdown, affecting insurance business as well.

“Most of the insured had deposited money in the cooperatives and paid the insurance fee with the interest. However, due to the collapse of the cooperatives, the way to pay the insurance fee of the insured has been closed,” said Khatri, adding, “Business as well has halted currently, closing the door for insured to pay the insurance fees. Many insured people were forced to surrender their policy due to not being able to pay the insurance fee.”

Insurance is done by people only after fulfilling their other basic requirements. At present, as the source of income has stopped, many people are struggling to meet their basic needs.