Term Insurance in Nepal Compared (2026): Cheapest Term Plans, Real Premiums & Term vs Endowment
By Wilson Shrestha · Updated 31 October 2026 (Kartik 2083) · Data: Nepal Insurance Authority, insurer plan listings, Budget 2083/84
Pure term insurance is the cheapest way to protect a Nepali family’s income — and it is also the product almost nobody in Nepal buys. Out of Rs 204.6 billion of life premium collected last fiscal year, plain term cover brought in just Rs 1.81 billion. This guide compares every major term plan on price, cover and claims, shows you the cheapest options, and runs the honest 20-year maths of term vs endowment — including the part where endowment does better than most term-insurance fans admit.
The short answer
- Cheapest long-term plan listed: Nepal Life Rakshya Kawach — about Rs 1,115 a year for Rs 5 lakh cover (roughly Rs 2.23 per Rs 1,000), cover up to Rs 1 crore, terms 1–35 years.
- Cheapest entry point: Nepal Life’s one-year Super Term plan on eSewa, from Rs 725 a year for Rs 5–20 lakh cover.
- Best value with stronger claims records: Himalayan Life New Term (Rs 1,250) and SuryaJyoti Surakchya Kawach (Rs 1,365) — both insurers settled 97–98% of claim value.
- Term vs endowment: the premium of a Rs 5 lakh endowment buys roughly Rs 1 crore of term cover. Endowment’s projected return (about 7%) actually beats today’s ~4% FD rates — so the real reason to choose term is cover size, not returns.
In this comparison
- The naming trap: “term” in Nepal’s statistics is not term
- Term insurance plans in Nepal compared (table)
- Cheapest term plan in Nepal, ranked
- Return-of-premium term plans: worth it?
- Term vs endowment in Nepal: the 20-year maths
- How much term cover you need
- Which plan fits your situation
- Tax benefit on term premiums
- How to buy term insurance in Nepal
- FAQs
The Naming Trap: Why “Term” in Nepal’s Data Usually Means Endowment
If you read Nepali insurance news in English, you will see headlines saying “term life” is Nepal’s biggest insurance product. That is a translation problem. The Nepal Insurance Authority’s category सावधिक जीवन बीमा (sawadhik) is endowment insurance — savings plus cover, with money paid back at maturity. Real term insurance, the pure-protection kind this article compares, is म्यादी जीवन बीमा (myadi).
Once you sort the labels out, the real picture of FY 2082/83 looks like this:
Life insurance premium by product, FY 2082/83 (Rs billion)
Source: Nepal Insurance Authority data for FY 2082/83 (14 life and 3 micro life insurers, total Rs 204.60 billion), as reported by Beema Post, August 2026. Category labels translated by us; “others” (Rs 3.64 bn) not shown.
Why this matters to you: when an agent says “term plan,” ask one question — “Do I get any money back if I survive?” If the answer is yes, it is not pure term, and you are paying for a savings product. That is not automatically bad (see the maths below), but you should know which one you are buying.
Term Insurance Plans in Nepal Compared (2026)
Below are the individual pure-protection term plans from Nepal’s life insurers, side by side. Premiums are the listed yearly premium for Rs 5 lakh cover, so every plan is priced on the same sum assured. The claims and solvency columns tell you how reliable the company behind the plan is.
| Insurer & plan | Yearly premium (Rs 5 lakh) | Term | Entry age | Claims settled* | Solvency** |
|---|---|---|---|---|---|
| Nepal Life – Rakshya Kawach | 1,115 | 1–35 yrs | 18–59 | 90.5% | 1.54 |
| Himalayan Life – New Term Assurance | 1,250 | 5–35 yrs | 18–65 | 98.1% | 1.32 |
| IME Life – IME Best Term | 1,315 | 5–30 yrs | 18–60 | 79.9% | 2.59 |
| SuryaJyoti Life – Surakchya Kawach Myadi | 1,365 | 1–30 yrs | 18–65 | 97.5% | 1.65 |
| Rastriya Jeevan Beema – Term Life Assurance | 1,375 | 5–20 yrs | 16–60 | 89.9% | n/a |
| Prabhu Mahalaxmi – Jeevan Surakshya | 1,825 | 5–30 yrs | 18–65 | 98.3% | 1.91 |
| Sanima Reliance – Term Assurance | 1,875 | 5–25 yrs | 18–65 | 81.0% | 1.57 |
| LIC Nepal – Amulya Jeevan | 2,294 | 10–44 yrs | 18–60 | 92.7% | 1.61 |
| National Life – Traditional Term | 3,020 | 1–5 yrs | 16–55 | 84.6% | 1.66 |
Premiums, terms and entry ages: insurer plan listings compiled by BFIS Compare (NepseTrading), October 2026. The listing does not publish the age profile behind each premium, so treat them as indicative starting rates, not quotes. *Share of claim value settled, FY 2081/82, derived from the NIA Annual Report. **Solvency ratio, Q4 FY 2082/83; NIA minimum is 1.30. Asian Life, Citizen Life and MetLife sell mainly short-term, micro, loan-linked or critical-illness term products, so they are covered separately below.
How to read this table: the cheapest plan is not automatically the best. Nepal Life is the cheapest and has the biggest branch network, but settled 90.5% of claim value. Himalayan Life and SuryaJyoti cost Rs 135–250 more a year on Rs 5 lakh and settled 97–98%. Over a 20-year policy that gap is a few thousand rupees — small next to the cover your family is counting on. For the full company ranking, see our best life insurance in Nepal scorecard.
Other term products you will be offered
- One-year renewable term: Nepal Life Super Term on eSewa (from Rs 725/year, Rs 5–20 lakh, age 18–60) and Asian Life Saral Surachha (published rates of Rs 3.75 to Rs 13.75 per Rs 1,000 by age band). Cheap today, but the premium rises as you age and renewal terms can change each year.
- Loan protection (credit) term: IME Credit Term (up to Rs 20 lakh) and Asian Karja Surachha (single premium, double cover on accidental death). Built to clear a loan if the borrower dies — useful alongside a home loan, not a replacement for family cover.
- Critical-illness term: MetLife LifeCare (My Life, Beautiful and Brave variants) and MetLife Critical Illness Plus pay on diagnosis of listed illnesses. More expensive because they cover more.
- Foreign employment term: compulsory for labour-permit holders and only valid for the contract period. Details in our foreign employment insurance guide.
Cheapest Term Plan in Nepal: Ranked by Cost of Real Cover
Rs 5 lakh is a gesture, not real income protection. So here is what each plan’s listed rate works out to for Rs 50 lakh of cover — a more realistic amount for a family with one earner.
Estimated yearly premium for Rs 50 lakh term cover (Rs)
Our estimate: listed Rs 5 lakh premium × 10. Real quotes depend on your age, health, smoking status and term, and some insurers give a discount on higher sums assured — so actual prices for big covers are often a little lower.
Return-of-Premium Term Plans: Are They Worth It?
The most common objection to term insurance in Nepal is “I pay for 20 years and get nothing back.” Insurers answer that with return-of-premium (ROP) term plans: Sun Nepal Swornim (about Rs 3,355/year for Rs 5 lakh), Nepal Life iEnsure (about Rs 2,946) and Prabhu Mahalaxmi’s Gajjabko Lagani Firta (about Rs 3,450). Survive the term and you get your basic premiums back.
Here is the honest maths on 20 years, comparing Sun Nepal Swornim with plain Rakshya Kawach for the same Rs 5 lakh:
| 20-year view (Rs 5 lakh cover) | Amount |
|---|---|
| Extra yearly cost of the ROP plan (3,355 − 1,115) | Rs 2,240 |
| ROP refund at maturity (20 × 3,355) | Rs 67,100 |
| Rs 2,240 a year in a 4% FD instead | about Rs 69,400 |
| Rs 2,240 a year at 6% instead | about Rs 87,300 |
Verdict: at today’s low deposit rates, an ROP plan is roughly a wash against “cheap term plus an FD” — it is not the rip-off it would be in a high-rate year. Its real cost is flexibility: your refund is locked for 20 years, and stopping early can forfeit it. Note also that Sun Nepal Swornim has a Rs 10 lakh minimum cover and Nepal Life iEnsure only starts full cover one year after issue (except accidental death).
Term vs Endowment in Nepal: The 20-Year Maths
Most “term vs endowment” articles in Nepal stop at “term is cheaper, endowment gives money back.” Let’s actually run the numbers. Same insurer, same Rs 5 lakh, 20 years:
- Term: Nepal Life Rakshya Kawach — Rs 1,115 a year.
- Endowment: Nepal Life Sunaulo Bhabisya — Rs 25,370 a year, with a declared bonus of Rs 60–65 per Rs 1,000 sum assured per year (FY 2081/82).
| – | Endowment only | Term + invest the difference |
|---|---|---|
| Yearly outlay | Rs 25,370 | Rs 1,115 + Rs 24,255 invested |
| Total paid in 20 years | Rs 5,07,400 | Rs 5,07,400 |
| Value at year 20 if you survive | Rs 11–11.5 lakh (if bonus holds) | Rs 7.5 lakh at 4% · Rs 9.5 lakh at 6% · Rs 12 lakh at 8% |
| Effective yearly return | About 6.9–7.3% | Whatever you earn |
| Paid to family if you die in year 5 | About Rs 6.5 lakh (5 lakh + bonus) | Rs 5 lakh + about Rs 1.4 lakh saved |
| Or: spend all Rs 25,370 on term | – | About Rs 1 crore of cover |
Our calculation. Endowment maturity = Rs 5 lakh + 20 years × Rs 60–65 per Rs 1,000; bonus rates are declared yearly and are not guaranteed. Investment growth assumes the yearly amount is saved at the start of each year. Commercial banks’ average maximum individual FD rate was about 4.0% for Kartik 2083 (before 6% TDS on interest).
The part most term-insurance articles get wrong
With FD rates near 4%, a well-run endowment’s ~7% projected return is better than parking the difference in a bank. “Buy term and invest the rest” only wins if you actually invest it — in something earning 7–8% or more, like a disciplined SIP — and keep doing it for 20 years. If the difference ends up spent, endowment wins by default.
So why do we still put term first? Because the bottom row is the one that matters. Rs 6.5 lakh does not replace 15 years of a breadwinner’s income. Rs 1 crore can. The job of life insurance is to pay out when the worst happens, and term does that job 20 times more efficiently.
Term vs endowment at a glance
Term (म्यादी) — choose if…
- Someone depends on your income
- You have a home or business loan
- You need big cover on a small budget
- You already save or invest separately
Endowment (सावधिक) — choose if…
- You know you will not save on your own
- You want a locked, low-risk lump sum
- You can pay the premium for the full term
- You already have enough term cover
The trap to avoid: surrendering an endowment in the first few years returns far less than you paid, which wipes out the ~7% return. Endowment only works if you are certain you can keep paying. Term has no such penalty — if you stop, the cover simply ends.
How Much Term Cover Do You Need?
A simple rule that works for most Nepali households:
Worked example
Ramesh, 30, earns Rs 8 lakh a year in Kathmandu. He has a Rs 15 lakh home loan, Rs 3 lakh in savings and an old Rs 5 lakh endowment. His target is 80 + 15 − 3 − 5 = Rs 87 lakh, so he rounds to Rs 90 lakh. At the cheapest listed rate that is roughly Rs 20,000 a year — less than the Rs 25,370 his parents’ generation pays for a Rs 5 lakh endowment. Because Rakshya Kawach caps cover at Rs 1 crore, he could also split it, e.g. Rs 50 lakh with one insurer and Rs 40 lakh with another, which spreads the claims risk too.
Which Term Plan Fits Your Situation?
| Your situation | What to buy |
|---|---|
| Young parent, single income | Long-term plan (20–30 yrs) at 10× income; keep the term until your youngest child is independent |
| Working abroad on a labour permit | The compulsory foreign employment policy ends with your contract — add a personal long-term term plan in Nepal so cover continues when you return |
| Home or business loan | Loan-protection term matched to the loan tenure, on top of family cover |
| Single, no dependents | Small or no cover now; buy when you marry or take a loan — but buying young locks a lower rate |
| Age 50+ | Check entry-age limits (most plans close at 59–65); expect a medical exam; compare against health cover first |
| Salaried, SSF member | Your SSF covers accident and disability, not a full death benefit for your income — term still fills the gap |
Tax Benefit on Term Insurance Premiums (FY 2083/84)
Term premiums count toward the same life insurance deduction as endowment: a resident individual can deduct the actual premium paid or Rs 40,000, whichever is lower, from taxable income. Health insurance premiums get a separate deduction of up to Rs 20,000.
- Budget 2083/84 doubled the tax-free threshold to Rs 10 lakh and cut the top rate to 29%. If your income is below the threshold, the deduction saves you little or nothing.
- At the top rate, a full Rs 40,000 deduction saves up to Rs 11,600 a year.
- A Rs 90 lakh term plan (about Rs 20,000) plus a modest endowment can fill the Rs 40,000 cap — better than one Rs 25,000 endowment that gives only Rs 5 lakh cover.
Self-employed? Read how insurance deductions fit your return in our freelance tax guide.
How to Buy Term Insurance in Nepal (Step by Step)
Red flags when buying
- The “term plan” pays money back on survival but nobody mentions a higher premium — it is an endowment or ROP plan.
- Pressure to drop cover to a round Rs 5 lakh to “keep it affordable.”
- Cash paid to an agent without an official company receipt.
Frequently Asked Questions
Which is the cheapest term plan in Nepal?
Among long-term individual plans, Nepal Life’s Rakshya Kawach has the lowest listed premium, about Rs 1,115 a year for Rs 5 lakh cover, with terms of 1–35 years and cover up to Rs 1 crore. For a one-year policy, Nepal Life’s Super Term on eSewa starts from Rs 725 a year.
Is term or endowment better in Nepal?
Term is better for protecting your family because the same premium buys about 20 times more cover. Endowment can be reasonable as forced savings — its projected return of around 7% beats current FD rates — but only if you keep paying for the full term and already have enough term cover.
How much does Rs 1 crore term insurance cost in Nepal?
Based on listed rates, roughly Rs 22,000 to Rs 28,000 a year with the cheaper insurers, and up to Rs 45,000 or more with others. Your real premium depends on age, health, smoking status and the term you choose.
Do I get money back from term insurance in Nepal?
Not from a pure term plan — it pays only if you die during the term. Return-of-premium plans such as Sun Nepal Swornim and Nepal Life iEnsure refund your basic premiums on survival, but cost two to three times as much.
Is term insurance premium tax deductible in Nepal?
Yes. Term premiums qualify for the life insurance deduction of the actual premium or Rs 40,000 a year, whichever is lower, under the Income Tax Act for FY 2083/84.
Can I buy term insurance online in Nepal?
Yes. Nepal Life’s Super Term plan can be bought in the eSewa app, and SuryaJyoti sells its Sahi term plan through an online portal. Larger long-term covers usually still need KYC and a medical check.
Why is so little term insurance sold in Nepal?
Pure term made up only Rs 1.81 billion of Rs 204.6 billion in life premium in FY 2082/83. Buyers dislike “getting nothing back,” and agents earn more commission on endowment and money-back plans, so term is rarely offered first.
The bottom line
For income protection, term insurance in Nepal is unbeatable on price: about Rs 1,100–1,400 a year per Rs 5 lakh with the cheaper insurers, so real cover of Rs 50 lakh to Rs 1 crore costs about what one small endowment does. Nepal Life Rakshya Kawach is the cheapest; Himalayan Life and SuryaJyoti offer near-identical prices with stronger claims records.
Buy term first, sized to your income and loans. Then decide calmly whether your savings should go into an endowment, an FD or an SIP — using the maths above, not an agent’s brochure.
Keep reading
Start with our complete guide to insurance in Nepal, then compare companies in best life insurance in Nepal. Add medical cover with health insurance in Nepal, and check what your savings would earn instead with the latest FD interest rates and our SIP calculator.
Sources
- Nepal Insurance Authority
- Beema Post – Life premium by product, FY 2082/83
- BFIS Compare – Life insurance plan listings and premiums
- ShareSansar – Nepal Life Super Term on eSewa
- NepseTrading – Kartik FD rates
- ShareSansar – Budget 2083/84 income tax changes
Last updated: 31 October 2026. Premiums are indicative listed rates and change with age, health and term; bonus rates are declared yearly and are not guaranteed. Confirm with the insurer before buying. This article is general information, not personalised financial advice.