As per the record of the Insurance Authority, policyholders have surrendered 104,406 policies worth Rs 14.27 billion in the last FY.
The surrender rate increased by 27.66 percent compared to the previous FY. in the previous FY, a total of 81,860 policies were surrender amounting to Rs 12.18 billion.
In the last FY, except for Rastriya Beema Sansthan, Asian Life and former Mahalaxmi Life Insurance, all companies has logged a growth in surrender rate.
Despite the number of surrenders of Rastriya Beema Sanstha is highest, it logged 14.81 percent decline in the surrender rate. The company that had logged 16,917 policy surrender in the previous FY recorded 14,411 surrenders in the last FY.
Similarly, former Mahalaxmi Life penned 14.29 percent decline in surrenders. 312 policy holders surrender their policies in the last FY compared to 364 of the previous FY.
Meanwhile, Citizen Life Insurance logged the highest growth i.e. 284.27 percent surrenders in the last FY.
The insurees surrendered 8,422 insurance policies of Rs 1.15 billion in Shrawan, 8,052 policies worth Rs 1.14 billion in Bhadra, 6,063 policies worth Rs 773.2 million and 6,746 policies worth Rs 1.11 billion in Kartik.
Similarly, they surrendered 7,650 policies worth Rs 1.01 billion in Mangsir, 6,782 policies worth Rs 874.3 million in Poush, 9,839 policies worth Rs 1.32 billion in Magh, 8,939 policies worth Rs 1.08 billion in Falgun and 9,358 polices worth Rs 1.18 billion in Chaitra.
Likewise they surrendered 10,797 policies worth Rs 1.30 billion, 9,733 policies worth Rs 1.03 billion in Jestha and 18,126 policies worth Rs 2.25 billion.
Since the trend of policy surrender is increasing, Insurance Board has been analyzing the reasons behind it.
In a bid to curb the policy lapse and surrender, the board has also issued Life Insurance Related Guidelines 2078 under which policyholders can take loans against policies or surrender the policies only after three years of policy issuance.
A section of the insurance sector blames insurance agents for the increasing trend of surrender. They believe that the agents force the general public to purchase insurance policies for their own benefit. Later, the policyholders surrender the policies due to the inability to pay premiums.
