{{TAG_OPEN_p_20} Kathmandu. The Nepal Insurance Authority (NIA) in collaboration with the Tribhuvan University Institute of Mathematics and Science has recently released an analysis study report on socio-economic factors affecting life insurance policy spending and surrender in Nepal. <\/p>\n<\/p>\n
The report presents a five-point strategic recommendation to curb the rising expense rate in the life insurance sector and to strengthen the cash flow of the insurers. <\/p>\n
1) Implement a mandatory pre-sale suitability assessment: <\/p>\n
The Insurance Authority of Nepal should mandate the criteria for financial underwriting and suitability of the insured before issuing the policy. Insurers should evaluate the continuity of the customer’s income and the current liability. Agents should be prohibited from selling policies for premiums that exceed the actual savings capacity of the customer, which will reduce the policy lapse rate by not being able to pay the premium later. <\/p>\n
2) Creation of a flexible insurance plan structure: <\/p>\n
Traditional savings insurance schemes should be restructured to include structural flexibility. Customers should be given the option to save insurance by providing flexible installment payments, automatic reduced payments or discounts on premium payments for a certain period of time instead of expiring the policy when they are in financial distress. <\/p>\n
3) Establishment of Dedicated Retention Unit at Branch Level: <\/p>\n
Life insurance companies should end the practice of relying only on agents and set up a separate customer protection and service desk at the branch level. Arrangements should be made to track the unrenewed insurance policies through the automatic early warning system and to renew the insurance policies of the inactive or retired agents by contacting them directly. <\/p>\n
4) Simplification of the Expired Insurance Renaissance Process: <\/p>\n
The administrative process for reviving expired insurance policies should be simplified and digitized. The insured should be encouraged to continue reinsured by waiving the penal interest rate on late payment during economic recession, ending the cumbersome paperwork. <\/p>\n
5) Insurance Literacy Campaign at the Grassroots Level: <\/p>\n
The authority and the insurance companies should jointly conduct targeted literacy campaigns at the local level. The general public should be made aware of the huge financial loss of surrendering the policy in the initial year, and the protective options such as credit facilities available on insurance policies and digital payment systems. <\/p>\n
According to the study report, according to the financial year 2080. In 81 years alone, 11,58,299 life insurance policies have been lost without renewal. This has put insurance premiums worth Rs 36.51 billion at risk. During the same period, 1,13,976 insurance policies were surrendered and Rs 14.50 billion was excluded from the tax system. <\/p>\n
According to the report, 78.9 percent of the insured said that they could not pay regular installments due to economic recession, loss of employment or decline in business. Also, 76 percent of the agents admitted that they used to get insurance due to pressure from relatives or friends. This is also confirmed by the feedback received from the insured. Of the insured who participated in the survey, 69.6 percent of the insured complained that the insurance policy was stuck due to the incorrect details of the agent or the temptation of inflated returns.<\/p>\n","protected":false},"excerpt":{"rendered":"
{{TAG_OPEN_p_20} Kathmandu. The Nepal Insurance Authority (NIA) in collaboration with the Tribhuvan University Institute of Mathematics and Science has recently released an analysis study report on socio-economic factors affecting life insurance policy spending and surrender in Nepal. The report presents a five-point strategic recommendation to curb the rising expense rate in the life insurance sector […]<\/p>\n","protected":false},"author":5,"featured_media":254982,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45031,45067,45152,45159],"tags":[],"class_list":["post-322752","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banner-news-en","category-important-en","category-life-insurance-en","category-news-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/322752","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/comments?post=322752"}],"version-history":[{"count":1,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/322752\/revisions"}],"predecessor-version":[{"id":322753,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/322752\/revisions\/322753"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/media\/254982"}],"wp:attachment":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/media?parent=322752"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/categories?post=322752"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/tags?post=322752"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}