Page 8 - Life Insurance Today FEBRUARY 2016

the insurance available in the urban areas and is a low
Insurance has remained low in the priorities of the eco-
nomically downtrodden sections of the society, historically.
But ironical it is these sections that are hopelessly depen-
dent on whatever little assets that they have created over
a period of time and are really in need of protecting them,
apart from their own lives and health!
However, it is beyond their comprehension to understand
the importance of insurance.This emphasizes the need for
making these masses understand the importance of insur-
ing their health, even lives & assets, etc. and inculcate in
them the habit. This is a task that demands conviction and
commitment - of several stakeholders.
Micro-finance is the most important socio-economic devel-
opment of our times. Due to the economic circumstances
the poor had no bank facilities for a long time. But with
the concept of micro-credit coming in picture it has been
proved that the poor can become credit worthy if they form
small groups.
Micro-credit in India started in big way in the 90's. In the
late 90s, numerous agencies involved in micro-credit op-
erations in India started adding other financial services,
including micro-insurance to its micro-credit operations.
The importance of micro-finance can be seen from the view
point that in spite of the fact that there are many banks in
the country, still poor people specially in the rural areas by-
passed the formal banking procedure and formed there own
groups for the micro-finance activities.
MICRO-INSURANCE refers to the insurance of the lower-
income people. It is very different from the other types of
Life is a series of natural and spontaneous changes. Don't resist them - that only creates sorrow. Let reality be reality. Let things flow
naturally forward in whatever way they like.
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value product. It requires different design, different distri-
bution strategies and also requires active involvement of
an intermediate agency, health providers, and third party
administrators representing the target community.
Insurance is emerging as the necessity for the low-income
people too. Recent developments in India, as elsewhere,
have shown that not only can the poor make small peri-
odic contributions that can go towards insuring them
against their health risks but also that the risks they face
(such as those of illness, accident and injury, life etc.) are
eminently insurable as these risks are mostly independent
or idiosyncratic. Thus, insurance is fast emerging as a pre-
paid financing option for the various risks facing the poor.
Government of India and certain NGOs had started the mi-
cro-health insurance scheme in India. But the success of
these schemes have started now and one of the reasons
for Micro-finance and other is the reform, which has made
the new, and the private sector companies to come for-
ward and work for the benefit of the poor. Although the
reach of these insurance schemes are very limited,only to
the 2 million individuals,there is a huge potential seen in
the near future. The overall market is estimated to reach
Rs. 250 billion by 2008 (ILO 2004).
IRDA had given relaxations in the regulations pertaining to
micro-health insurance products; and thus the process has
been initiated. The insurers would do well to extend their
hand in the fulfillment of this noble cause; and work in the
spirit of accomplishing the task and not merely go through
the motions mandatorily.
The distributors should take it upon themselves the task of
explaining to the masses the need for insurance in a man-
ner that they can comprehend. In the end, it should be a
combined effort of all the stakeholders to ensure that in-
surance is understood as a vital tool for the betterment of
the living standards of the downtrodden masses.
The past decade has seen the growth of micro-insurance
involving health cover in many different countries. In In-
dia, too, several people's organizations and NGOs have
been experimenting with various micro-insurance products
involving health coverage. While the long-term viability of
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