News of Insurance – Nepal’s insurance sector has witnessed notable progress in recent years, particularly through innovative and impactful policies targeting low-income populations. One such initiative is Citizens Life Insurance Company’s Micro Term Policy, which is making a significant contribution by offering financial risk protection and ensuring loan security for low-income individuals. With minimal premiums and substantial coverage, this policy is supporting improved living standards for underserved communities.

In an exclusive conversation with Banking News, Citizens Life’s Head of Sales and President of the Women Forum, Rita Karki, shared insights into the significance, features, and future plans surrounding this unique policy.

According to Karki, life insurance typically serves three main purposes: savings, investment, and risk coverage with the latter becoming increasingly vital in today’s context. Citizens Life’s Micro Term Policy specifically addresses risk coverage in a simple and affordable format, tailored to the needs of lower-income groups. It offers high protection at a very low premium.

In a developing country like Nepal, low-income individuals often take concessional loans from cooperatives and financial institutions to engage in income-generating activities such as goat farming, agriculture, and small businesses. However, if a borrower passes away unexpectedly, their family can be left with the financial burden of loan repayment. The Micro Term Policy helps mitigate such risks by ensuring loan repayment in the event of the borrower’s death.

The policy ensures that outstanding loans from cooperatives or financial institutions are covered, thus safeguarding families from unexpected financial stress. Citizens Life has been operating in Nepal’s insurance market for the past eight years and has rolled out this policy in collaboration with various financial institutions, making it easily accessible and user-friendly.

Typically, the policy offers insurance coverage of NPR 100,000 for an annual premium of just NPR 500, though premiums may vary based on benefit levels. In the event of the insured’s death, the policy provides up to NPR 200,000, along with an additional death benefit. The insurance company pays off the outstanding loan to the lending institution and transfers the remaining amount to the family, ensuring both loan protection and family support.

This design encourages low-income individuals to take productive loans without the fear of long-term liabilities in case of unfortunate events. It also reduces the economic burden on families and enhances the overall security of the lending process.

To date, Citizens Life has partnered with over 800 banks, cooperatives, and financial institutions, and the policy has already covered more than 5.8 million individuals. The company emphasizes not just business expansion but also raising insurance awareness through campaigns in both urban and rural areas. By leveraging digital platforms, Citizens Life continues to simplify access to insurance services while prioritizing customer-centric solutions.

As life remains uncertain, many low-income individuals turn to financial institutions for loans to sustain their livelihoods. While such loans can uplift their economic status, unexpected events can turn them into liabilities. By insuring against these uncertainties, borrowers gain mental peace and ensure a secure future for their families. Citizens Life’s Micro Term Policy, through its low-premium, high-coverage model, is helping to build resilience and economic stability among Nepal’s vulnerable populations.