Insurance Glossary

The sum assured (बीमाङ्क) is the guaranteed amount an insurance company agrees to pay under a life insurance policy. On death during the policy term, the nominee receives the sum assured (plus any accrued bonus for endowment plans). If the policyholder survives to maturity, they receive it as a lump sum payout. In Nepal, minimum sum assured starts from as low as NPR 50,000 and can go up to NPR 1 crore or more for high-value policies. When choosing your sum assured, a common rule of thumb is 10–15 times your annual income.

बीमाङ्क भनेको बीमा कम्पनीले जीवन बीमा पोलिसी अन्तर्गत तिर्न सहमत भएको ग्यारेन्टेड रकम हो। बीमा अवधिमा मृत्यु भएमा नामाङ्कितले बीमाङ्क (र एन्डोमेन्ट योजनाको लागि जम्मा बोनस) पाउँछन्।

The premium is the amount you pay — annually, semi-annually, quarterly, or monthly — to your insurance company in exchange for coverage. In Nepal, annual payment is most common and often the cheapest option. If you miss a premium payment, most companies offer a 30-day grace period before the policy lapses. Premiums are calculated based on your age, sum assured, policy term, plan type, and health status. For term plans, premiums are significantly lower than for endowment plans offering the same death coverage.

प्रिमियम भनेको तपाईंले बीमा कम्पनीलाई कभरेजको बदलामा वार्षिक, अर्ध-वार्षिक, त्रैमासिक वा मासिक रूपमा तिर्ने रकम हो। नेपालमा वार्षिक भुक्तानी सबैभन्दा सामान्य र प्रायः सबैभन्दा सस्तो विकल्प हो।

The claim settlement ratio (CSR) is one of the most important metrics when choosing a life insurer in Nepal. The Nepal Insurance Authority does not publish an official per-company settlement ratio, so on this site we derive it from the NIA's published figures as the share of claim value an insurer has paid out versus the amount still outstanding. A consistently high ratio signals a reliable, fast-paying insurer; a low one is worth questioning. Treat any single figure as a derived indicator rather than an official score, and check an insurer's claims record before comparing premiums — the cheapest policy is worth little if the payout is slow or disputed. See our claim settlement page for the current figures across all 14 insurers.

क्लेम निपटान अनुपात (CSR) नेपालमा जीवन बीमाकर्ता छान्दा महत्त्वपूर्ण मापदण्डमध्ये एक हो। नेपाल बीमा प्राधिकरणले प्रति-कम्पनी आधिकारिक अनुपात प्रकाशित गर्दैन, त्यसैले हामी यो प्राधिकरणको तथ्याङ्कबाट भुक्तानी भएको दाबी रकम बनाम बाँकी रकमको हिसाबले निकाल्छौं। उच्च अनुपात भरपर्दो बीमाकर्ताको सङ्केत हो।

Bonus is an additional amount declared by life insurance companies each year on with-profit (endowment, whole life, money back) policies. In Nepal, bonuses are typically expressed as a rate per NPR 1,000 of sum assured — for example, Rs. 50/1000 SA means you earn NPR 50 for every NPR 1,000 of sum assured each year. Once a bonus is declared and vested, it cannot be taken away even if the company's performance worsens later. Bonus is added to the final maturity or death payout. Pure term plans do not earn bonuses. Bonus rates vary among Nepal's 14 insurers and are re-declared each year, so compare current rates rather than relying on past figures.

बोनस भनेको जीवन बीमा कम्पनीहरूले प्रत्येक वर्ष मुनाफा-सहित पोलिसीहरूमा घोषणा गर्ने अतिरिक्त रकम हो। नेपालमा बोनस सामान्यतया बीमाङ्कको प्रति NPR १,००० मा दर रूपमा व्यक्त गरिन्छ।

The surrender value is what you receive if you decide to cancel (surrender) your life insurance policy before it matures. In Nepal, policies must be in force for at least 3 years before a surrender value builds up. After 3 years, the surrender value is typically a percentage of the total premiums paid, minus surrender charges. The longer you hold the policy, the higher the surrender value as a percentage of the premiums paid. Pure term insurance policies have no surrender value — if you stop paying premiums, the policy simply lapses with nothing returned. Endowment and whole life policies build surrender value over time. Before surrendering a policy, also check whether the loan facility might meet your immediate cash need instead.

सरेन्डर मूल्य भनेको परिपक्वता अघि नै पोलिसी रद्द गर्दा तपाईंले पाउने रकम हो। नेपालमा कम्तीमा ३ वर्ष पोलिसी कायम रहेपछि मात्र सरेन्डर मूल्य बन्छ।

A rider is an optional extra benefit you can add to your base life insurance policy, usually for a small additional premium. Common riders available from Nepal's life insurers include: Accidental Death Benefit (pays double or extra sum assured if death is accidental), Critical Illness Rider (lump sum payout on diagnosis of specified illnesses like cancer, heart attack, stroke), Disability Rider (waives future premiums or pays a benefit if you become permanently disabled), and Waiver of Premium Rider (premiums are waived if you become disabled or critically ill). Riders significantly increase the value of your coverage — especially the accidental death rider, which is highly relevant given Nepal's high accident rates.

राइडर भनेको सामान्यतया थोरै अतिरिक्त प्रिमियममा आफ्नो आधार जीवन बीमा पोलिसीमा थप्न सकिने ऐच्छिक अतिरिक्त लाभ हो।

An endowment plan (एन्डोमेन्ट योजना) is the most popular type of life insurance in Nepal. It provides two benefits in one: life protection (death benefit) and a savings component (maturity benefit). If you die during the policy term, your nominee receives the sum assured plus accrued bonuses. If you survive to the end of the term, you receive the same amount as a lump sum. The annual premium for an endowment plan is significantly higher than a pure term plan — typically 5 to 7 times more for the same death coverage. All 14 Nepal life insurers offer endowment plans. They are suitable for people who want forced savings with built-in insurance, or who are saving toward a specific goal like a child's education or retirement.

एन्डोमेन्ट योजना नेपालमा सबैभन्दा लोकप्रिय जीवन बीमा प्रकार हो। यसले दुई लाभ एकसाथ प्रदान गर्छ: जीवन सुरक्षा र बचत।

A pure term plan provides only life coverage — no savings component. If you die during the policy term, your nominee receives the full sum assured. If you survive to maturity, you receive nothing and the policy ends. This sounds like a drawback, but the advantage is dramatic: the annual premium for a term plan is 5 to 7 times lower than an equivalent endowment plan. A 35-year-old can buy NPR 1 crore of coverage for as little as NPR 60,000–80,000 per year from Nepal's most competitive life insurers. Financial experts often recommend the "Buy Term, Invest the Rest" strategy — buy cheap protection through term insurance, and invest the premium savings separately in fixed deposits, mutual funds, or a provident fund.

शुद्ध टर्म योजनाले केवल जीवन कभरेज प्रदान गर्छ — कुनै बचत घटक छैन। यदि तपाईं बीमा अवधिमा मृत्यु हुनुभयो भने नामाङ्कितले पूर्ण बीमाङ्क पाउँछन्।

ULIP (Unit-Linked Insurance Plan) is a type of life insurance where part of your premium provides life coverage and the remainder is invested in market-linked funds (equity, debt, or balanced), so returns are not guaranteed and depend on fund performance. ULIPs are common in markets like India, but as of our 2026 review no Nepali insurer sells a true unit-linked plan — Nepal's market is traditional: term, endowment, whole-life and money-back. So if an agent offers you a "market-linked" or guaranteed-return "investment" plan, treat it as a warning sign and ask for the product's regulatory approval in writing before signing anything.

ULIP एक प्रकारको जीवन बीमा हो जहाँ प्रिमियमको केही भाग जीवन कभरेज दिन्छ र बाँकी बजार-लिंक्ड कोषमा लगानी गरिन्छ; रिटर्न ग्यारेन्टेड हुँदैन। हाल नेपालमा कुनै पनि बीमकले साँचो युनिट-लिंक्ड योजना बिक्री गर्दैन — नेपाली बजार पारम्परिक (टर्म, इन्डाउमेन्ट, होल-लाइफ, मनी-ब्याक) नै छ।

A money back plan pays a percentage of the sum assured back to you at regular intervals — typically every 3 to 5 years — during the policy term. For example, a 20-year money back plan might pay 20% of the sum assured at year 5, another 20% at year 10, another 20% at year 15, and the remaining 40% plus bonuses at maturity. If you die at any point during the term, your nominee receives the full sum assured regardless of how much has already been paid back. The annual premium for money back plans is the highest of all plan types. They are most popular with business owners and self-employed individuals who want predictable liquidity at regular intervals.

मनी ब्याक योजनाले बीमा अवधिमा नियमित अन्तरालमा बीमाङ्कको प्रतिशत फिर्ता तिर्छ। उदाहरणका लागि, २०-वर्षीय मनी ब्याक योजनाले वर्ष ५, १०, १५ मा भुक्तानी गर्न सक्छ।

A whole life insurance plan provides coverage for the insured's entire life, rather than a fixed term of 10, 20, or 30 years. Premiums are typically paid for a set period (e.g. 20 years) but coverage continues until death. The sum assured and accrued bonuses are paid to nominees whenever death occurs — there is no maturity date in the traditional sense. Whole life plans build significant cash value over time and are often used for estate planning and inheritance purposes. In Nepal, whole life plans are available from most life insurers (MetLife is one exception) and often carry strong bonus accumulation over the long run. They are best for people who want to leave a guaranteed financial legacy for their children or dependents.

सम्पूर्ण जीवन बीमा योजनाले निश्चित अवधिको सट्टा बीमितको सम्पूर्ण जीवनको लागि कभरेज प्रदान गर्छ।

The nominee (नामाङ्कित) is the person you designate to receive the insurance claim payout in the event of your death. You name your nominee when you first take out the policy. In Nepal, common nominees are spouses, children, and parents. You can change your nominee at any time by submitting a nomination change form to your insurance company. Important: the nominee's name on the policy must match their official citizenship certificate (नागरिकता) exactly — even a spelling difference can cause delays or complications when a claim is filed. If your nominee is a minor (under 18), you must also appoint an adult guardian to receive the payout on the minor's behalf until they come of age.

नामाङ्कित भनेको तपाईंले तपाईंको मृत्युको अवस्थामा बीमा क्लेम भुक्तानी प्राप्त गर्न नियुक्त गर्नुभएको व्यक्ति हो।

A policy lapses when premiums are not paid within the grace period — typically 30 days for annual policies and 15 days for monthly policies in Nepal. A lapsed policy provides no death coverage. If you die while the policy is lapsed, your nominee will not receive any claim. To reinstate a lapsed policy, you must apply for revival within the allowed period (usually 2–5 years of lapsation, depending on the company), pay all outstanding premiums with interest, and in some cases undergo fresh medical underwriting. Prevention is far easier than revival — set calendar reminders for premium due dates and always keep your contact details updated with your insurer so you receive reminder notices.

ग्रेस पिरियडभित्र प्रिमियम तिरिएन भने पोलिसी ल्याप्स हुन्छ। ल्याप्स भएको पोलिसीले कुनै मृत्यु कभरेज प्रदान गर्दैन।

Policy revival is the process of reinstating a lapsed life insurance policy. In Nepal, most insurers allow revival within 2 to 5 years of the lapse date. To revive a policy, you typically need to pay all outstanding premiums with interest (usually 8–12% per annum), submit a fresh health declaration or medical report, and complete the company's revival application form. The main advantage of revival over buying a new policy is that you retain your original policy date and all accrued bonuses — which can be substantial if the policy is several years old. If revival is not possible or too expensive, surrendering the policy and starting fresh may sometimes be the better option.

पोलिसी रिभाइभल भनेको ल्याप्स भएको जीवन बीमा पोलिसी पुनः सक्रिय गर्ने प्रक्रिया हो।

Nepal Beema Pradhikaran (NIA), formerly known as Beema Samiti, is the exclusive regulator of Nepal's insurance industry, operating under the Ministry of Finance. It was renamed following the Insurance Act 2079 (2022). NIA licenses all 14 life insurers, approves every insurance product before it can be sold, sets minimum capital requirements (currently NPR 5 Arba for life insurers), monitors solvency through the Risk-Based Capital framework, and handles consumer complaints. If an insurance company in Nepal is not NIA-licensed, it is operating illegally. You can verify any company's license status at nia.gov.np. NIA also publishes annual reports with claim settlement data, premium income figures, and company rankings — all publicly available and free.

नेपाल बीमा प्राधिकरण (NIA), पहिले बीमा समिति भनिने, अर्थ मन्त्रालय अन्तर्गत सञ्चालित नेपालको बीमा उद्योगको एकमात्र नियामक हो।

The maturity benefit is the payout you receive at the end of an endowment or money back policy term if you are still alive. It consists of the sum assured plus all accrued bonuses declared over the policy term. For example, if you hold a 20-year endowment with NPR 25 lakh sum assured and bonuses have accumulated at an average of Rs. 50/1000 SA per year, your maturity benefit would be the NPR 25 lakh sum assured plus accumulated bonus of about NPR 25 lakh (Rs 50 per 1,000 of sum assured, on 2,500 thousands of SA, over 20 years) = approximately NPR 50 lakh total. Maturity benefits in Nepal are generally not subject to income tax. The maturity claim process is simpler than a death claim — the company usually contacts you proactively.

परिपक्वता लाभ भनेको तपाईं बाँचिरहनुभएमा एन्डोमेन्ट वा मनी ब्याक पोलिसी अवधि समाप्त भएपछि पाउने भुक्तानी हो।

The grace period is the additional time allowed after a premium due date during which you can still pay your premium without the policy lapsing. In Nepal, the standard grace period is 30 days for annual, semi-annual, and quarterly policies, and 15 days for monthly policies. During the grace period, your policy remains fully in force — if you die during the grace period, your nominee still receives the full claim. After the grace period expires, the policy lapses and coverage ceases. Mark your premium due dates clearly and always pay at least a few days before the due date to avoid any risk of the payment not being processed in time.

ग्रेस पिरियड भनेको प्रिमियम भुक्तानी मिति पछि पोलिसी ल्याप्स नभई प्रिमियम तिर्न पाइने थप समय हो।

An actuary is a specialist in mathematics, statistics, and financial theory who calculates insurance premium rates, policy reserves, and the long-term financial sustainability of insurance products. Every life insurance company in Nepal is required by NIA to employ a qualified actuary. The actuary's job is to calculate the probability of death at each age, determine how much premium is needed to cover expected claims and expenses, ensure the company maintains adequate reserves, and certify that products are financially sound before NIA approves them. Actuaries are among the highest-paid finance professionals in Nepal. The premium you pay is the direct output of actuarial calculation — different companies have different actuaries using different assumptions, which is why premiums vary across the 14 insurers.

एक्चुअरी गणित, तथ्याङ्क र वित्तीय सिद्धान्तका विशेषज्ञ हुन् जो बीमा प्रिमियम दरहरू, पोलिसी भण्डार र बीमा उत्पादनहरूको दीर्घकालीन वित्तीय दिगोपन गणना गर्छन्।

Risk-Based Capital (RBC) is a solvency framework introduced by Nepal Insurance Authority in fiscal year 2080/2081 (2023/24). Under RBC, insurance companies must hold capital reserves proportional to the actual risks they are underwriting — rather than a flat minimum. A company writing high-risk policies must hold more capital than one writing lower-risk policies. This makes the insurance sector more financially stable and protects policyholders from company insolvencies. The minimum paid-up capital for life insurers was simultaneously raised from NPR 2 Arba to NPR 5 Arba. The RBC framework is a significant step toward aligning Nepal's insurance regulation with international standards.

जोखिम-आधारित पुँजी (RBC) आर्थिक वर्ष २०८०/२०८१ मा नेपाल बीमा प्राधिकरणले लागू गरेको सोल्भेन्सी ढाँचा हो।

Underwriting is the process by which an insurance company evaluates the risk of insuring a person before issuing a life insurance policy. In Nepal, underwriting for standard policies typically involves completing a health declaration form, disclosing any pre-existing medical conditions, and for higher sum assureds, undergoing a medical examination. The underwriter (often the company's actuary or a specialist) reviews this information to decide whether to: accept the policy at standard rates, accept with an extra premium loading (for higher-risk applicants), exclude certain conditions from coverage, or decline the application. Non-disclosure of a material health condition during underwriting is the most common reason for claim rejection in Nepal — always be fully honest on your proposal form.

अन्डररिटिङ भनेको जीवन बीमा पोलिसी जारी गर्नु अघि बीमा कम्पनीले व्यक्तिको बीमा जोखिम मूल्यांकन गर्ने प्रक्रिया हो।

A paid-up policy is created when you stop paying premiums after a minimum number of years (usually 3 years in Nepal) but choose not to surrender the policy. The sum assured is reduced to a "paid-up value" based on how many premiums you have paid out of the total required. The policy then remains in force at this reduced coverage level without any further premium payments. No new bonuses are earned after the policy becomes paid-up, but previously vested bonuses are retained. This is a useful option if your financial situation changes and you can no longer afford premiums but want to retain some coverage rather than surrendering everything.

पेड-अप पोलिसी तब बनाइन्छ जब तपाईं न्यूनतम वर्षहरू (सामान्यतया नेपालमा ३ वर्ष) पछि प्रिमियम तिर्न बन्द गर्नुहुन्छ तर पोलिसी सरेन्डर नगर्ने निर्णय गर्नुहुन्छ।