Kathmandu. In Nepal, nearly half of the total population is covered under the cover of insurance, while the average sum insured is only Rs 276,000. In the absence of a key member of an ordinary family, this is a very small amount for the living of his dependent family.
In general, how much life insurance is required for a person is estimated on the basis of his existing income. According to experienced experts in the life insurance sector, the sum assured should be fixed at least 15 to 20 times the annual income of a person.
fiscal year 2081. According to the Economic Survey of 1982, the per capita gross national income of Nepalis has reached 1,517 US dollars i.e. Rs 211,831 when calculated on the basis of exchange rate. On this basis, the per capita income of 15 years is more than Rs 3.177 million, so the average sum insured should be at least Rs 3 million.
Based on the average sum assured published by the Insurance Authority, the average sum assured of Nepalis is only 1.3 times the total annual income. On this basis, the sum assured of the insured in Nepal is very low.
In neighbouring India, the average sum insured is more than three times. According to the ‘Underinsurance Survey 2025’ published by Bajaj Alliance Life Insurance in association with National IQ, the average insured’s annual income is only 3.1 times.
When calculating the minimum sum assured for life insurance, it is considered appropriate to use the following formula:
minimum sum assured=Annual income x 10+ loans and other financial obligations
Minimum sum assured = Annual Income x 10times + Loans/Liabilities.
‘Underinsurance’ is the absence of adequate sum insured to meet future financial obligations. Similarly, the condition of having more insurance than required refers to the state of ‘overinsurance’ or more insurance.
Nepal Insurance Authority (NEA) has said that 48.33 percent of the population has access to insurance based on the total population and the total number of insurance policies issued. NeA has drawn this conclusion from the ratio between the sum of term, micro, foreign and term insurance policies and the total population (including adjusted for the growth rate).
