In recent years, the authority has increased the surrender period from two years to three years due to the increase in the tendency of insurance to be abandoned midway.
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The direct impact of the decline in the economy has also started to affect the insurance sector. As for why the insured left the insurance in the middle, although the reason is not certain, experts say that most of them leave the insurance in the middle because they are unable to proceed with the insurance because of the financial situation and the reduction in the ability to take a loan from the bank.
In the financial year 2077/78, 63 thousand 331 insured left the insurance in the middle. For that, they withdrew Rs 9.88 billion from the companies. It is the amount withdrawn from the insurance companies by leaving the policy before the maturity period specified at the time of insuring.
Even in the financial year 2078/79, 81 thousand 860 people left the insurance in the middle and withdrew 12.18 billion rupees. It seems that the trend of leaving insurance in the middle has continued even in the financial year 2079/80. According to the authority's data, 96 thousand 938 insured people withdrew their insurance policies in that financial year and withdrew 13 billion 34 million rupees.
In the financial year 2080/81, 19,460 policyholders left the policy and withdrew 13.29 billion from the company. Compared to the financial year 2079/80, the number of people giving up insurance has increased in 2080/81, but the amount withdrawn seems to be less. In the five months of the current financial year, 45 thousand 60 policyholders left the policy midway and 6 billion 10 million 72 million rupees have been withdrawn from the companies. The mentioned data confirms that the trend of giving up insurance in the middle of the last year is continuously increasing.
The president of Jeevan Bimak Sangh Nepal said that due to the decline in Nepal's economy over the past few years, there has been a tendency to quit insurance.
'When there was a decline in the economy, there was a decrease in the per capita income of the insured, so the number of surrenderers was also high, since the signs of improvement in the economy began to show in the last month, it seems that the number of giving up insurance has also started to decrease,' he said, 'between the improvement of the economy and the continuation of the insurance policy, there is a negative (in the economy) When there is a decline, the number of people abandoning insurance increases and when the economy improves, there is a relationship Chairman Paudel said that another main reason for not being able to continue. Cooperatives have not been able to return the savings of many lower level citizens. This has broken their cash flow cycle. This has also affected the insurance policy. However, he says that a study has been started regarding the reasons why the insured started abandoning the insurance policy in the middle.
Along with the laxity in economic activity, there can be many reasons including trust in insurance, behavior of companies and actors, not getting corona insurance money, lack of insurance literacy. Experts say that there is a risk that such trends may hinder the development and expansion of the entire insurance sector.
Madan Dahal, president of Nepal Insurance Authority, admits that there has been an increase in the tendency to quit insurance in the last few years. "The main reason is that the insured was unable to continue the insurance due to the decrease in the ability to take loans from the bank," he said, "However, this cannot be the only reason." In some cases, it seems that even because the agent changed the organization, some of them could not continue the insurance. But the depth of this reason is not sure.' Chairman Dahal informed that the insurance authority is studying to find out the reason for the tendency to abandon insurance in the middle of
. "The study team has representation from the authority, life insurance association, experts, etc.," he says, "The study will find out the real cause." He also says that insurance may have been affected due to the decline in the economy.
The agent says that there are more benefits/conveniences when getting insurance than what is in the policy. But the behavior of the company during the claim is different and more complicated than that," said the chief executive officer of an insurance company, "besides, they have not paid a large amount of corona insurance even now. Even among the damage claims caused by the flood last October, only very little has been paid.'
In recent years, the authority has increased the surrender period from two years to three years after the tendency to leave the insurance in the middle. However, the company says that there is no improvement. In the last few years, new insurance companies are opened and when the agent goes to the new company, the customer is also taken with them. Currently, the authority has arranged that insurance agents cannot be affiliated to more than one insurance company.
The regulatory body Insurance Authority and Life Insurance Company are also worried about the increasing trend of abandoning the policy every year. Last week, the authority has also formed a study team to find out the reasons behind the increase in insurance policy abandonment. However, the team has not started work till Friday. The team includes senior officials of the Insurance Authority, representatives of the Life Insurance Association and others. Based on the suggestions of the team, necessary steps will be taken to stop the tendency of leaving midway, said authority sources.
