The mountaineering porters, sirdar and guides will get the life insurance cover of Rs 1.5 million and the health insurance of Rs 400,000 from September 1, 2014, the Ministry of Culture, Tourism and Civil Aviation (MOCTCA) announced.
Earlier, their life insurance and health insurance amounts were Rs 1 million and Rs 300,000 respectively.
However, the insurance coverage of liaison officers to be deputed by the Ministry of Tourism remains unchanged.
The labour dispute between sherpas and the Nepalese government, which earns large revenues from mountaineering, saw scores of expeditions cancelled, with only one successful summit after most climbers abandoned their plans to scale the 8,848-metre (29,029-foot) peak.
All national and international operators have been told to comply with the new decision from this autumn season.
The decision has been hailed by Nepal Mountain Guides Association.