Kathmandu. With the increasing use of digital wallets, life insurance services have added some ease to the insured. Through the digital wallet or mobile banking app, the insured has the facility to pay the renewal insurance fee at any time.
The digital wallet not only provides the facility of payment of first insurance fee, renewal insurance fee, but also the facility of paying interest on the insurance loan. The insured who has taken a loan against the life insurance can pay the interest and principal of the loan at any time. This provision is included in the general terms of the policy.
- Succus on payment of insurance loans through digital wallet
- At least Rs. Impractical provision to pay Rs 5,000
- Increased insurance for those with limited savings
- Not all insurers provide facilities through digital wallets
Digital wallet service providers have set limits on payment of principal interest on insurance loans. At least Rs 5,000 must be paid while paying interest and principal of the insurance loan through digital wallet.
For example, even if the interest on a loan of Rs 40,000 taken by an insured is only Rs 2,200, the insured must pay at least Rs 5,000. Not only this, after paying all the interest amount, at least Rs 5,000 must be paid even if the principal is paid. The digital wallet does not agree to pay less than that.
After paying the interest amount in lump sum, the digital wallet has curbed the facility of paying the principal amount on a daily basis.
“You can’t pay less than Rs 5,000 at a time,” complains the general insured, adding, “It would have been much easier to pay Rs 1,000-2,000 per day.” ’
By the time the insured deposits Rs 5,000, the interest on the principal will increase further. Life insurers capitalize on the interest amount in 6-6 months.
In this way, the impractical provision of not being able to pay the principal amount in a small way and the payment of at least Rs 5,000 at a time has increased the risk of confiscation of the insurance policy.
According to life insurers, the average amount of loan used against the insurance policy ranges from Rs 45,000 to Rs 75,000. It is easy to imagine the saving capacity of the insured who uses such a small amount of loan.
Digital payments are also a means of making retail payments up to Rs 1-2 possible immediately. However, at least Rs 5,000 has directly contributed to the confiscation of the insurance policy as the principal of the insurance loan set by the digital wallet operator himself.
The life insurer should provide the facility of making any amount of payment with the digital payment service provider as per the convenience of the insured. If the life insurer does not do so, the Insurance Authority of Nepal should instruct the insurer and digital wallet service provider in this regard for the benefit of the insured. There is also a need to direct the AUTHORITY to implement the provision of payment of principal interest on insurance loan through digital wallet to all life insurers.
According to the report of the Office of the Auditor General, the number of surrendered insurance policies issued by the life insurance companies in the fiscal year 2080. It has reached 113,976 out of 81. This number also includes confiscated insurance policies. If the principal and interest amount of the loan taken by the insured exceeds the surrender value of the policy, the policy is confiscated. After confiscation, the insured will not be able to get even one more dose.
According to data published by Nepal Rastra Bank( NRB), the number of digital wallet users in Nepal has crossed 26.37 million in the last april. Similarly, the number of mobile banking users has reached 27.12 million.
This number of mobile banking and digital wallet users has shown immense potential in the use of digital means to provide all kinds of services for businesses, both life insurance or non-life insurance.
Not all life insurers have provided the facility of paying the principal and interest of insurance loans through digital wallets.
