Basic Terminology

Life insurance is a protection against financial loss that would result from the premature death of an insured. For example, if Ram got accident and loss his life than his family will have very difficult time to overcome his absent in terms of emotionally and financial. When Ram lost his life in accident, Insurance amount will help his family to recover from Financial Lost. Nominee/beneficiary i.e his wife Rama will receives amount of Rs 1 Crore plus bonus accrued by the policy till his death. This amount Rama will receive from ABC Life Insurance will assist her to continue their daily necessary like children school fees, daily necessity etc. OR If nothing happen to Ram and he continue paying premium. After 20 years on maturity he will receive Rs 1 Crore plus bonus Amount Company have declared. For example, if company have average bonus rate of around 55 per year. Then Ram will receive around Rs 21,000,000/- ( 2 Crore 10 lakhs). He can use this amount for higher study of his child or marriage ceremony or any other investment.

Just like Bank have saving account, fixed deposit account and other account types. In same way Life insurance have different types of plan or product. Mainly: Endowment, Anticipated (Money Back), Whole Life, Child Endowment, Term Plan etc

Endowment policy are a type of life insurance policy, which provides the combined benefit of insurance coverage and savings. Endowment plan helps the insured to save regularly over a particular time period in order to avail a lump-sum amount at the maturity of the policy. On maturity the policy holder will receive Sum Assured and Bonus declared by company to the policy holder. However, in case of death of the insured during the policy tenure, a sum assured amount as death benefit along with bonus (if any) is paid to the beneficiary of the policy.

Anticipated or Money Back plan is also a type of Endowment Plan. In Money Back plan the company will pay certain percentage of Sum Assured to the policy holder on regular interval of time. But, premium might be higher than regular Endowment Plan. For example, If Ram is insured with Yearly money back plan of 5% from an Insurance Company for Sum Assured (SA) of 20 Lakhs at premium of amount Rs 2 lakhs per year for 20 years on 1st Feb 2022. On second year i.e 1st Feb 2023 the company will pay him Rs 5% of 20 Lakhs ie. Rs 1 Lakhs. This amount is called as Survival Benefit. He will continue to pay his premium for another 20 years. Depending upon money back term, RAM will receive Rs 1 Lakhs per year another 19 years. On Maturity i.e 1st Feb 2040 RAM will receive Rs 1 Lakhs plus bonus amount his policy have obtained.

Term Policy is pure life Insurance policy, this policy is much cheaper than regular endowment plan. For example, if you want to insure with Rs 1,000,000 you might have to pay only Rs 5,000*/- per year. This policy does not provide you amount on maturity. In this policy nominee of insured will receive Sum Insured Amount upon death of insured. This plan are also called none participating plan as bonus is not provide on this plan. On some term policy, company are giving back amount of basic premium paid by customer on maturity.

This is a type of endowment policy, which have both saving and life insurance components. In this policy child is insured and one of the parent will also be insured by the Rider. For more information about Rider click here. Parents typically choose this type of policy for their child future. Where on maturity they will receive Sum Assured and Bonus accrued by the policy.

Once your policy is approved by Underwriter of the company, premium will remain constant throughout. It will never change till maturity, if you do not make any changes on it. Amount to be paid can vary according to different insurers and products, following are the factors that remain constant for all insured person who like to insure: • Sum assured (Insurance Amount) • Length of policy term • Age Many time people of same age, same policy type and length of policy can have different premium. Below are some of the factor that can increase premium to be paid: • Height and weight • Medical history • Family medical history • Occupation • Lifestyle choices e.g. intake of alcohol and tobacco etc.

Immediately after birth but is different from organization to organization. Some organization can give insurance policy to your child immediately but risk coverage may start from Later. Risk coverage means, from which age does the Insurance Company insured your child.

In Nepal if you are 16 years old and above you can apply for Life Insurance policy. However, if you are below 16 years old, then your parents have to apply for Child Insurance Policy.

You can Insured yourself by contacting Agent or Branch Office of Life Insurance Company. If you can contact Life Insurance branch office counter than you may get additional discount on premium.

Underwriter is the person who reviews the application for your insurance proposal and decides if your application is acceptable and at what premium rate. This process is also called as Underwriting.

Life Insurance is a contract between a person and company from where we purchase policy. There are certain conditions which cannot be changed once policy is purchase like Term, Sum Assured etc. However, few other clauses like mode of premium payment, nominees, and riders can be changed. Riders can be added or removed from your policy any time, upon request of insured.

No, sum assured (SA) of a policy could not be added or deducted.

No life insurance policy covers only death risk no any medical benefit is given.

Policy document/ policy paper are very important legal agreement associated with the insurance contract. Therefore, serious safety is required to preserve the policy. But, if lost due to some reason one must immediately apply for duplicate copy. However necessary official procedure has to be completed and some official charge has to be paid.

Stop the contract or surrender the policy; according to Beema Samiti insured must pay at least 3 years of premium to surrender policy. If you like to calculate tentative surrender value click on this link: https://rghimire.com.np/surrender-value-calculation/

Premiums can be paid mainly in Yearly, Half yearly, quarterly or Monthly mode.

After COVID-19 almost all companies accept their premium through major wallet service providers like eSewa, Khalti, Connect IPS etc. Also, they accept the premium amount if you deposit the premium amount directly on their bank account no.

Yes, several Life Insurance Companies offer Login system through their mobile application. Using the portal one can check all premium payment history and due date.

Yes, Insurance Company provide you this service, to link your family member policy contact your life insurance company.

Yes, loan can be received to the extent of certain limit of premium paid but only after two three years and one must had paid at least three years annual premium.

Usually five years. However, it may differ by policy purchased.