That 8.34% gap represents hundreds of thousands of Nepali workers who leave for the Gulf, Malaysia, Japan, and South Korea every year — legally required under the Foreign Employment Act 2064 (वैदेशिक रोजगार ऐन, २ff।) to carry mandatory life insurance before departure. For families back home in Nepal, this policy is often the only financial safety net if something goes wrong abroad.
⚠️ Mandatory for All Migrant Workers: You cannot legally receive Shram Swikriti (श्रम स्वीकृति — Work Permit) without proof of Foreign Employment Life Insurance. This applies to all workers going through NIA-licensed labour channels.
In This Guide
1. What Is Foreign Employment Life Insurance? (वैदेशिक रोजगार म्यादी जीवन बीमा)
Foreign Employment Life Insurance is a mandatory term life insurance policy that every Nepali citizen must purchase before obtaining Shram Swikriti to work in foreign countries designated under the Foreign Employment Act 2064. It is a pure risk cover — similar to term life insurance (म्यादी जीवन बीमा) — but with specific coverage designed for overseas occupational hazards.
The policy is regulated by the Nepal Insurance Authority (NIA) and the Department of Foreign Employment (DoFE). Premiums are fixed by NIA directive — not the individual insurer — ensuring all 14 life insurance companies offer the same rate.
2. Who Is Covered & Countries Included
Coverage applies to Nepali workers obtaining Shram Swikriti for employment in designated labour-receiving countries. The primary destinations include:
3. Coverage Benefits: What Does the Family Receive?
| Event | Coverage / Benefit | Approximate Amount |
|---|---|---|
| Death (Any Cause) While Abroad | Full Sum Assured paid to nominee | NPR 14 – 20 Lakh+ |
| Accidental Death | Additional ADB benefit on top of base sum assured | Double Sum Assured |
| Permanent Total Disability (PTD) | Full Sum Assured paid to worker | NPR 14 – 20 Lakh+ |
| Partial Permanent Disability (PPD) | Proportional disability benefit | Proportional to % disability |
| Repatriation of Remains | Body transportation costs to Nepal | Up to NPR 1 Lakh |
| Medical Treatment Abroad | Emergency hospital expenses overseas | Up to NPR 2 Lakh |
📌 Real Scale: In F.Y. 2081/82, Nepal’s life insurers — including FE policies — settled 302,659 claims totalling NPR 78.98 Billion. For migrant workers and their families, this is not a theoretical safety net — claims are being paid actively across all 14 licensed life insurance companies.
4. How to Buy — Process, Premium & Duration
- Get Labour Approval from DoFE: Confirm your destination country and job position is approved by the Department of Foreign Employment.
- Visit Any NIA-Licensed Life Insurer: Approach any of the 14 life insurance companies. Premium rates are NIA-fixed and identical across all companies.
- Submit Documents: Citizenship Certificate, recent passport-size photograph, copy of passport, Labour Demand Letter, and completed proposal form.
- Pay Premium: A single upfront premium covering the entire term (typically 2 years). Premium amount depends on NIA-specified sum assured tier.
- Receive Policy Bond: Keep the original policy bond safely. Your nominee must produce this for death/disability claims.
- Shram Swikriti Cleared: Present proof of insurance to DoFE. Work permit is issued after verification.
5. How the Family Claims the Benefit from Nepal
If a worker dies or becomes disabled abroad, the family/nominee in Nepal initiates the claim. Follow our full Life Insurance Claim Process Guide for complete documentation. Specific additional requirements for FE claims:
| Document | Required For |
|---|---|
| Original FE Policy Bond | All claims |
| Death Certificate (attested by Nepali Embassy abroad) | Death claims |
| Copy of Shram Swikriti / Work Permit | All claims |
| Nominee’s Citizenship Certificate | All claims — must match policy records |
| Post-Mortem / Medical Report (Embassy certified) | Accidental death / disability |
| Repatriation Receipt / Airport Documents | Body repatriation claims |
⚠️ If the claim is refused: The family has the legal right to escalate to the Nepal Insurance Authority’s Claims Redressal Bench. NIA has binding authority to order payment with statutory interest. Do not accept an informal verbal rejection from the insurer.
6. FE Insurance vs Regular Term Life Insurance
| Feature | FE Life Insurance | Regular Term Life Insurance |
|---|---|---|
| Mandatory / Optional | Mandatory by Law | Optional |
| Policy Term | Typically 2 years (per Shram Swikriti) | 5 to 30 years |
| Premium Structure | Single lump sum, NIA-fixed rate | Annual / quarterly, market-competitive |
| Repatriation Cover | Yes — included | No |
| Overseas Medical Cover | Yes — emergency treatment | No (unless rider added) |
| Maturity / Savings Benefit | None (pure risk cover) | None (but consider endowment for savings) |
💡 Pro Tip for Migrant Workers: FE insurance covers you while abroad. Many migrant workers also maintain a separate long-term endowment policy in Nepal to build savings for when they return. This can also be funded from abroad using NRN premium payment channels.
7. Frequently Asked Questions
Is Foreign Employment life insurance compulsory in Nepal?
Yes. Under the Foreign Employment Act 2064 and DoFE regulations, proof of valid life insurance is a mandatory prerequisite for obtaining Shram Swikriti. Workers cannot legally depart for designated countries without it.
Which company should I buy FE insurance from?
Premium rates and coverage terms are standardised by NIA across all 14 life insurance companies. The main differentiator is the claim settlement speed. Check the Claim Settlement Ratio (CSR) of companies before choosing.
What happens if a worker dies in an undocumented incident abroad?
The family must obtain a death certificate authenticated by the Nepali Embassy in that country. If authentication is delayed, contact NIA’s grievance cell for guidance — they have established diplomatic channels for precisely these situations.
Can a worker buy additional voluntary term life insurance on top of FE insurance?
Yes. Since the Principle of Contribution does not apply to life insurance, a worker can simultaneously hold FE insurance and a separate term life policy or endowment policy in Nepal. Both pay independently upon death.
📚 Related Guides for Migrant Workers & Families
Need Help with Foreign Employment Insurance or a Family Claim?
Whether you are a worker departing Nepal or a family member trying to claim a benefit, our independent advisors provide free, unbiased guidance on FE insurance procedures.