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For an Insured Future

A new company starts operations in the life insurance sector with new packages

By A CORRESPONDENT

In Srimadbhagavad Gita, Lord Krishna told his disciple, friend and relative Arjuna, "Yoga Kshemam Bahamyahem," (that is, your welfare is my duty). With the same mission, Life Insurance Corporation (LIC) Nepal Limited has formally launched its operations beginning this week.

New insurance company : Insured enough ?

A joint venture between the Life Insurance Corporation of India and the Vishal Group of Nepal, the LIC Nepal has a capital base of Rs 250 million in which the LIC India owns a 55 percent stake, while the Vishal Group owns 25 percent. The rest will be sold to general public.

The company has introduced two policies, Money Back and Endowment policy, to begin with. According to the company, the Endowment policy is a low-cost insurance policy, which provides high protection to the family of the policyholder and a large sum for happy retired life. Loan facility provides adequate liquidity in case of urgent needs.

The Money Back policy, on the other hand, enables policyholders to receive periodic lumpsum payments to provide for needs such as purchase of automobiles, booking of house property, etc. besides providing life insurance to the family.

While the Endowment policy has a minimum term of five years and minimum sum assured is Rs 10,000, that of Money Back policy is 15 years and the minimum sum assured is Rs 20,000. Both the policies offer bonuses and provide accident benefit at the rate of Rs one per thousand sum assured. The company also offers non-medical scheme and term rider benefit to its policyholders.

Inaugurating the company amid a function Monday, Minister of State for Finance Bharat Kumar Shah said the government had decided to open the life insurance sector to make it competitive and thereby benefit the people. LIC Nepal is the fourth life insurance company, which got its operating license in August 2001.

N.C. Sharma, managing director of LIC India, said LIC India was the biggest company in the world in terms of the number of policies sold (over 110 million) in a single year. With a network of 800,000 agents and over 2,000 branches, LIC India sells settles one claim every second, he said.

For Nepal, the insurance market is still in infancy with the insurance premium standing at less than one percent of the total GDP. "There is a vast virgin land for a life insurance company in Nepal," said Dr. Prafulla Kafle, chairman of the Insurance Board. "Besides benefiting local people, the insurance provides for long and short-term funding required for infrastructure project and private sector development." Chairman of the Vishal Group, J.P. Agrawal, said the new company would strive for bringing social stability and prosperity in Nepal. A commitment that the new company needs to fulfill in the days ahead.