1. The 3-Year Statutory Threshold (बीमा ऐन २०७९)
Under the Insurance Act 2079, a life insurance policy acquires a guaranteed surrender value and paid-up status only after completing a minimum of 3 full annual premium payments.
CRITICAL WARNING: Year 1 & Year 2 Default
If you stop paying premiums in Year 1 or Year 2, the policy lapses with ZERO refund. 100% of your paid premiums are absorbed by the insurer to cover initial administrative and agent commission charges.
2. Paid-Up Policy Formula (Safe Exit Without Capital Loss)
If you have paid for 3 or more years but can no longer afford future premiums, do not surrender the policy. Instead, apply to make it a Paid-Up Policy. The insurer reduces your sum assured proportionally without penalizing your principal:
Paid-Up Sum Assured = (Number of Premiums Paid / Total Number of Premiums Payable) × Original Sum Assured + Vested Bonuses