Kathmandu. Big savers have turned to life insurance companies in search of suitable returns after banks and financial institutions kept the interest rate on all types of deposits below 6 percent due to excessive liquidity.
With the attraction of the insured towards single insurance (fixed deposit insurance), the current fiscal year 2081. Life insurance companies have collected a total of Rs 6.80 billion in insurance premiums till Mid-May 2018. In the same period of the last fiscal year, a total of Rs 2.38 billion was collected.
According to The Nepal Insurance Authority, the last fiscal year 2080. The income from single insurance has increased by 184.92 percent in the same period of the current fiscal year as compared to the first 11 months of 2018/19. Its contribution to the total insurance income has also increased from 1.79 percent to 4.39 percent due to the increase in single insurance collection.
According to the monthly bulletin published by the NRA, the number of sales of such insurance policies has also increased by about 42 percent with the increase in the demand for single insurance insurance. A total of 14,632 single policies were issued in the first 11 months of the last fiscal year, while 20,746 policies were issued in the first 11 months of this year.
The annual average return of insurance in the life insurance market is 5 to 6 percent. On this basis, the agent is encouraging for term insurance by returning the commission of the first insurance fee, including the agent incentive to the insured.
The interest of the insured towards term deposit insurance has increased due to the slightly higher returns compared to the bank interest rate, risk bearing up to the sum insured, the facility of paying a lump sum insurance, the facility of paying less than the sum amount while making a lump sum payment.
Between 2077 and 2078, when the annual interest rate on fixed deposits exceeded 12 percent, the insured took loans against the insurance policy and kept the fixed deposit in the bank. At that time, most of the life insurers provided insurance loans at an interest rate of 10 percent per annum.
