In Nepal, Insurance is a legal risk transfer mechanism between a policyholder and a company providing financial security against unforeseen events like death, illness or property damage. It involves paying a premium to get protection against risk, covering life (eg. life assurance) and non-life (eg. property , motor, health). NIA (Nepal Insurance Authority) is the primary regulatory body responsible for licensing, regulating and developing the insurance sector.
Key Concepts Explained
- Sum assured:- The guaranteed amount payable by the insurer on the death of the assured or maturity of the policy.
- Premium:- The amount paid to the insurer to keep the policy active.
- Life Assured:- The person whose life is protected by the policy.
- Nominee:- The person chosen to receive the benefit.
- Exclusions:- Specific situations or events not covered by the policy.
The core purpose of insurance is to provide financial protection and peace of mind against unexpected, catastrophic losses by transferring risk from an individual or business to a larger entity (the insurance company).