Foreign Employment Insurance Nepal: Full Guide

Updated August 2026. Benefit amounts are from the Nepal Insurance Authority’s foreign employment term life directive of 2080. Note that a proposal to abolish this compulsory insurance was drafted in 2025 — its current status is unconfirmed. Verify before relying on any figure.

If a Nepali worker dies abroad, the family is usually told “there is insurance” — and then discovers there are actually three separate systems, run by three different bodies, with three different claim routes. Getting them confused is why families chase the wrong office for months.

The Three Things People Confuse

	1. Term life insurance	2. Welfare Fund	3. SSF scheme
What it is	A private insurance policy, made compulsory by law	A government fund	A contributory social security scheme
Legal basis	Foreign Employment Act 2064 s.14 + NIA directive 2080	Foreign Employment Act 2064 s.33	Contribution-Based Social Security Act
Who administers	Licensed insurers	Foreign Employment Board	Social Security Fund
You pay	One-off premium by age and term	Fixed contribution at labour approval	Monthly contribution
Claim goes to	The insurer	The Board	SSF

A family may be entitled under more than one at the same time. Claiming from the insurer does not disqualify you from the Welfare Fund. If a worker has died, ask about all three — separately.

The Insurance: What It Actually Pays

Under the foreign employment term life directive, on death from any cause:

Component	Amount
Sum insured (बीमांक)	Rs 10,00,000
Cremation / funeral (किरिया खर्च)	Rs 1,00,000
Loss of income to the family	Rs 2,00,000
Repatriation of the body	Rs 1,00,000
Total on death abroad	Rs 14,00,000

⭐ This resolves the number everyone argues about. You will hear “the insurance is Rs 10 lakh” and “the insurance is Rs 14 lakh”, and both are right. Rs 10 lakh is the sum insured; Rs 14 lakh is the total including the three add-on components. If an agent quotes only Rs 10 lakh, ask specifically about the cremation, income-loss and repatriation components.

Also provided: Rs 10,00,000 for permanent total disability (partial disability scaled), and Rs 5,00,000 for critical illness, with up to Rs 1,00,000 for pre-diagnostic or accident treatment.

Policy term

Must run at least six months longer than the employment contract — so it covers the gap around return.

Banned destinations

Insurers may not issue policies for countries where the Government of Nepal has banned foreign employment. If no insurer will cover it, that is a signal about the destination.

Premium

Age- and term-banded. One insurer’s published table runs from about Rs 1,486 to Rs 18,222 across age bands 18–35, 36–50 and 51–64, plus around Rs 400 for the critical-illness rider.

Who pays

The recruitment agency procures it under the Act — but in practice the cost is passed to the worker. Ask for the policy document and the receipt, not just a line on a bill.

⚠ This requirement may be abolished — watch for it. In 2025 the Ministry of Labour, Employment and Social Security drafted an amendment to scrap the compulsory term life insurance and fold insurance and welfare contributions into a single fund. The stated rationale: insurers collected around Rs 3.12 billion in premium against Rs 1.42 billion in claims. It was a draft bill with the Ministry of Law at the time, and we could not confirm its status a year on. If you are departing soon, confirm what is currently mandatory rather than assuming either way.

🤝 A family member died or was injured abroad?

Tell us where they were working and through which agency. Digital Solution will help you identify which of the three systems apply and what each one needs — so you are not sent between offices.

📲 WhatsApp: +977 9766597181 Our Services →

The Welfare Fund: The Second Claim

Separate from insurance, every worker contributes to the Foreign Employment Welfare Fund at labour-approval time — commonly reported at around Rs 1,500. It is administered by the Foreign Employment Board and provides financial assistance on death or disability, free repatriation of the body, family health treatment support and reintegration help.

We are not printing a Welfare Fund death-assistance figure. The amount commonly quoted is Rs 7 lakh, with reports of an increase to Rs 10 lakh, but we could not verify either from the Board itself. Ask the Foreign Employment Board directly — it publishes a payment-status helpline for death, disability and family-health applications.

The free body-repatriation service is real and is the Board’s, not the insurer’s. Families sometimes pay privately to bring a body home while an entitlement exists. Contact the Board before arranging anything yourself.

How to Claim, in Order

Get the death registered and documented in the country of death, and obtain the certificates. See our death registration guide for the Nepal side.
Contact the recruitment agency for the insurance policy number and the insurer’s name. They procured it; they hold the record.
File the insurance claim with the insurer — that is claim number one.
Separately approach the Foreign Employment Board for welfare assistance and repatriation — claim number two.
Check SSF separately if the worker was enrolled — claim number three.
Keep a written record of every submission, with dates and the name of who received it.

Honest limitation: we could not obtain an official, step-by-step document list or a statutory timeline for a death-abroad claim from a primary source. Ask each body for its written checklist rather than relying on any article, including this one.

Frequently Asked Questions

Is insurance compulsory for foreign employment from Nepal?

Yes, under Section 14 of the Foreign Employment Act 2064, with terms set by the Nepal Insurance Authority’s 2080 directive. A proposal to abolish it was drafted in 2025 — confirm the current position.

Is the payout Rs 10 lakh or Rs 14 lakh?

Both figures are correct. Rs 10 lakh is the sum insured; Rs 14 lakh is the total with cremation, income-loss and repatriation components added.

Who pays the premium?

The recruitment agency procures the policy under the Act, but the cost is generally passed to the worker. Ask for the policy document.

How long does the policy last?

At least six months longer than the employment contract period.

Is the Welfare Fund the same as the insurance?

No. They are separate systems with separate claim routes — the insurer for insurance, the Foreign Employment Board for welfare. A family may be entitled to both.

Does the Board really repatriate the body free?

The Board publishes a free body-repatriation service. Contact it before arranging anything privately.

What if the worker went abroad irregularly?

Entitlements are tied to going through the legal process with labour approval. That is one of the strongest practical reasons not to depart irregularly.

Does SSF cover foreign employment too?

There is a separate SSF scheme for foreign employment. Check it independently — see our SSF foreign employment guide.

Sources

Foreign Employment Act 2064 — Section 14 (compulsory insurance) and Section 33 (Welfare Fund).
Nepal Insurance Authority foreign employment term life directive, 2080 — benefit schedule as reported in detail by insurance press.
Citizen Life published foreign employment premium table.
Foreign Employment Board published welfare services and helpline.
2025 reporting on the draft amendment to abolish compulsory migrant worker term life insurance.

Foreign Employment Insurance in Nepal: The Three Systems Families Confuse