Kathmandu. Despite the lack of access to insurance to the majority of the population in Nepal, the number of insurance surrenders and lapses is increasing every year. In this way, a large amount of money has been coming out of the insurance market due to the surrender of the insurance policy, and on the other hand, the number of the amount of the insured who has not been renewed within the stipulated time is also increasing.
The number of insurance policies in Nepal’s insurance market seems to be the same. Laps occur when the policy is not renewed as per the regulatory provisions. In this way, not only the insured is guilty of lapsing the insurance policy, but the insurance companies are equally responsible.
Due to the lack of adoption of the latest increasing technology, it seems that the insurance market does not renew the insurance policy and some insurance policies are spent. This trend seems to be increasing due to less coordination between the insured and the agent and the insured and the insurer.
In Nepal, only 43-44 percent of the population is still covered under insurance. The role of the agent is more important than the insurer, mainly in the life insurance sector. Agents are playing the role of informing the general public about the insurance policy, showing the importance of insurance and contacting the insured from time to time even after insuring. However, most agents abdicate or abdicate their responsibilities. As a result, the number of insurance surrenders has increased, as well as many renewals, and the number of lapses is increasing.
On the other hand, there are some problems in the life insurance sector, such as the agent not selling the insurance policy properly to the insured, financial pressure on the insured, not being so aware of insurance, etc.
Some reasons for increased insurance surrender
forced sales
The sale of insurance policies under pressure by agents without evaluating the financial aspects, including people’s income and income, has also increased dedication. Another reason could be to sell insurance policies without being well informed.
financial pressure
Even when there is financial pressure, the insured surrenders the policy. It has been found that the money received after the surrender of the insurance policy meets their immediate financial needs (bills for medicines and health treatment, house maintenance and other unintended incidents).
Other good options
If the insured finds any other good insurance plan for himself, he will surrender the old policy. In some cases, the agent himself offers to surrender the previous insurance policy to the insured and take another insurance plan. This has also increased dedication.
high insurance
Although the insurance fees are high in the initial years, the insured who are paying easily later surrender even if the financial balance is disturbed. When the financial balance is broken, the insured has no other option but to surrender as he is unable to pay the insurance fee due to high.
Low bonus rate
Life insurance companies maintain low bonus rates on some insurance plans. Due to this low bonus rate, the insured surrenders the insurance policy and can take another good bonus rate insurance plan. This has also increased the dedication of insurance.
Lack of insurance knowledge
It has been found that the insured surrenders the insurance policy even though he does not have knowledge about the values and values and benefits of the insurance plan. Dedication is also increasing due to lack of knowledge that insurance will provide financial security in the future as well as become a source of good income.
