Almost everyone in Nepal has a relative or friend who sells life insurance. And almost every pitch sounds the same: "You get protection AND your money back with bonus!"
It's a tempting idea. It's also where a lot of confusion starts.
They do two different jobs
Insurance protects your family from a financial shock: death, serious illness, accident. You pay a premium so that if something terrible happens, there's money.
Investing is about growing money over time.
When a policy tries to do both, like endowment plans and money-back policies, you often end up with too little protection and modest returns. Ask the agent for the actual sum assured versus the premium, and compare it with a pure term life plan. The difference can be eye-opening.
When buying insurance, read for
- What's covered, and especially what's excluded
- Waiting periods (common in health insurance)
- Claim process and documents needed
- What happens if you miss a premium
When it's sold as an investment, ask
- What return is guaranteed, and what is only "projected"?
- What do I get back if I surrender in year 3?
- How much of my premium goes to commissions and charges?
Who needs what
If people depend on your income, life cover is important. Health cover is important for almost everyone. Check that the insurer and agent are licensed by the Nepal Insurance Authority.
And don't cancel an old policy or sign a new one just because someone is pressuring you this week. Take the documents home and read them.
General information, not personal financial advice. Rules, rates and fees change, so check with the official source before you act.
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