Micro Insurance - An Assurance for Common Man

Abstract

In India, the Below Poverty Line population is more than 40 crores with per capita income below 90/- per day at Purchasing Power Parity rates. This segment is not covered by insurance. Therefore, the Governments, insurance companies, Microfinance Institutions, Self Help Groups, banks, health institutions and Co-operativ es can play an important role in promoting insurance to this section of society. MFis occupy a unique position in providing micro insurance, as they have extensive networks and are already offering financial services to rural and urban clients. In some cases, MFis link with formal insurance companies and act as agents. MFis also form joint ventures with Insurance Companies. Some MFis team up with professional insurance providers, who have technical expertise in this area. Micro insurance through its various delivery models can be implemented to promote insurance and eradicate poverty. In developing countries, it is a tool which is des igned for the lower income groups. Micro insurance gives protection to the poor against various risks like life, illness, death, health, disability, property and agriculture. Through micro insurance, poverty can be eradicated, which leads to better quality of life in India.