(1) The Government of Nepal shall establish a term life insurance fund for the insurance of civil servants.
(2) By deducting two hundred rupees from the monthly salary of every civil servant, sub-section
(1) will be deposited in the fund and the same amount will be added by the Government of Nepal and a term life insurance of one lakh rupees will be provided for twenty years. When the employee retires from the amount accumulated in the insurance fund, the insurance amount and bonus payment will be given to him.
(3) In case of death of a civil servant before the twenty years from the commencement of deducting the amount in accordance with sub-section (2), his family shall receive one lakh rupees. In case of compulsory retirement from service of any civil servant, the following amount will be provided –
(a) Ten thousand rupees if the amount is deducted for a period of less than one year,
(b) Twenty five thousand rupees if the amount is deducted from one year to five years (c) Fifty thousand rupees if the amount has been deducted from five years to ten years,
(d) Seventy-five thousand rupees if the amount is deducted from ten years to fifteen years,
(e) One lakh rupees if the amount has been deducted for twenty years. But if the amount deposited by him and the amount of interest and dividend is more than the mentioned amount, the same amount will be provided from the said fund.
(4) If a civil servant is separated from the service in any other manner, except in the case of compulsory retirement before the twenty years of commencement of depositing the amount in accordance with sub-section (2), such employee shall be provided with an amount equal to the surrender value.
(5) Notwithstanding anything written in sub-sections (2) and (3), an employee who retires from civil service may continue to continue the amount accumulated for term life insurance to mature in a period of twenty years or less. But the Government of Nepal will not bear any amount for this.
(6) Other arrangements related to term life insurance fund shall be as prescribed.