What is microinsurance?
Microinsurance is a subset of insurance intended to lower the cost of necessary insurance products. It reduces insurance to a far smaller entity than it was in the past.
Microinsurance products are made specially to cover medical expenses, death benefits, and assets with reduced values. They take care of low-income households’ particular requirements.
Microinsurance operates based on the concept of risk pooling. It combines multiple small units into larger structures, creating networks of risk pools that enhance both insurance functions and support structures.
Here are a few key characteristics of microinsurance:
- Affordability. In order to guarantee affordability for customers with modest incomes, microinsurance premiums are kept low.
- Tailored coverage. It offers benefits for illness, accident, or death and concentrates on assets of lower value.
- Highly specific policies. Policies that address very particular needs are provided by microinsurance. It may, for instance, pay for burial costs, agricultural losses, and medical emergencies.
Below are the different delivery methods used by microinsurance schemes:
- Partner agent model. In this model the microinsurance program and an agent (or third-party healthcare provider) are in a partnership. The agency concentrates on design and development, while the scheme manages marketing and delivery.
- Provider driven model. The microinsurance scheme in this model directly provides and manages the products.
- Full service model. This approach includes all-inclusive services including customer support and claims processing.
- Community based model. This model entails community participation in both its creation and administration.
These are some microinsurance products offered by microinsurance scheme:
- Health microinsurance (primary health care, maternity)
- Life microinsurance
- Disability microinsurance
- Property microinsurance (Crop and livestock insurance)
