(1) In case of death of an employee while in service, his next of kin will be given one lakh fifty thousand rupees for insurance.
(2) The Government of Nepal shall establish a term life insurance fund. Two hundred rupees will be deducted from the monthly salary of each employee and will be deposited in the fund and the same amount will be added by the government of Nepal and the sum assured of one lakh rupees will be provided for twenty years term life insurance. Out of the amount accumulated in the insurance fund, when the employee retires, the insurance amount and bonus payment will be given to him.
(3) If any employee is compulsorily retired from service before the twenty year period from which the amount has been deducted as per sub-section (2), the following amount shall 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) If the amount is deducted from ten to fifteen years, seventy five thousand rupees,
(e) One lakh rupees if the amount has been deducted for twenty years. But if the amount deposited by him and its interest, dividend amount exceeds the mentioned amount, the same amount will be provided from the said fund.
(4) If an employee retires from service by any means other than in the case of death or compulsory retirement within twenty years of starting to deposit the amount in accordance with sub-section (1), an amount equal to the surrender value shall be provided to such employee.
(5) Notwithstanding anything written in sub-sections (2) and (3), an employee who retires from the health service may continue to deposit the amount for term life insurance so that it matures in a period of twenty years or less. But the Nepal government will not bear any amount for that.
(6) Other arrangements related to term life insurance fund shall be as prescribed.