Bancassurance is a growing trend and here is why you should buy your insurance from the bank.

Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.

Bancassurance is buying an insurance that covers through your bank. In this case, the bank acts as an agent for the insurance company which helps expand, reach and access to insurance products as well as offers convienance of managing and paying your insurance premiums.

Fact: there are 19 Life Insurance companies in Nepal.

  • Why should I buy a life insurance policy from the Bank (Bancassurance)?

Trust: The primary objective to buy insurance from the bank is to cover your risk and secondary as an investment tool. If you are not familiar with insurance companies and the various products they offer, but buying insurance policy through your bank can help you make more informed decisions. If you trust your bank with your money, it is likely you will trust their advice when it comes to choosing the right insurance product for your and your family.

One stop shop for all financial needs: Your bank will provide you financial advisory services before and during the life of the policy. As your bank may be an agent of more than one insurance company which will mean you will have a wide range of choices from which you can choose the most suitable for your needs.

Hassle free policy servicing: With bancassurance you can avoid the hassles of dealing with your agent to pay your premsium as the bank will deduct the premium from your bank account as per instruction and pay the insurance company directly. If the balance in your account is not sufficient, the bank will alert you and request you to deposit the funds. This largely will help you avoid late payment fees and fine.  

Assistance in policy claims and settlements: The bank will assist you in settlements after the maturity of the policy and in case of claims.  At maturity of the policy, the sum assured and bonus will be directly deposited in your bank account. In case of claims before maturity the bank will coordinate with the concerned insurance company to expedite claim process.

General Insurance Terminology

Insured – Party covered by an insurance policy.

Insurer -Company in an insurance contract undertaking to pay compensation.

Sum assured - Is the amount of money an insurance policy guarantees to pay up before any bonuses are added. In other words, sum assured is the guaranteed amount the policyholder will receive. This is also known as the cover or the coverage amount and is the total amount for which an individual is insured.

Premium - Is an amount paid periodically to the insurer by the insured for covering his risk.

Lapse - Termination of a policy due to failure to pay the required renewal premium.

Claim - A request made by the insured for insurer remittance of payment due to loss incurred and covered under the policy agreement.

Surrender value - It is the amount the policy holder will get from the life insurance company if he decides to exit the policy before maturity.