Page 9 - Life Insurance Today FEBRUARY 2016
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these efforts is yet to be established, what is increasingly insurance and to promote more inclusive insurance mar-
clear is that the healths of poor are insurable. Considering kets.
the huge importance that is associated with the task, we
are utilizing various contributions from experts who have But one encouraging fact is that these finding of various &
been working in the domain narrating their experiences and vivid researches made on this field revealed that micro-
suggesting ways to take the micro-insurance initiative for- health insurance is indeed viable in our society, and even
ward. profitable under certain circumstances, but a number of
difficulties must be overcomed for it to succeed. The au-
Just as thirty years ago, in the early years of the micro-fi- thor believes that we would be able to learn from our ex-
nance movement, the poor, and especially women, had to periences of those who came before, both those who have
prove that they are creditworthy and 'bankable', they have succeeded and those who have failed.
had to show that they are not to be dismissed as 'bad risk'.
The Basics of Micro-insurance:
Another difficult area for effective implementation of mi-
cro-insurance is adequate experience of the technical as- Micro-insurance is the protection of health, assets and lives
sistance health providers and donors. By having a better of those belonging to the economically weaker sections of
understanding of the challenges and potential solutions the society. They include micro-entrepreneurs, small farm-
associated with the provision of health insurance to the ers, landless labourers and low-income men and women
poor, it is hoped that these individuals and organizations through formal, semiformal, and informal institutions. In-
can use their financial and human resources more effec- dian Regulator, IRDA has considered the need for having a
tively to expand access to health insurance in rural mar- separate regulation on micro-insurance with setting out the
ket. objectives and salient features of the micro-insurance.
As a new field of activity, micro-health insurance often Fundamental Concept:
operates in an environment that was not designed for it,
and which can even be characterized as hostile. By acquir- Micro-insurance products are often bundled with micro-
ing an appreciation for the key differences between health savings and micro-credit, thereby allocating scarce re-
insurance and micro-health insurance, and recognizing sources to micro-investments with the highest marginal
where micro-health insurance potentially fits into a broader rates of return.
social protection framework, regulators, and policymakers
should begin to craft an enabling environment to nurture Micro-insurance is the most underdeveloped part of micro-
and support the growth and development of micro-health finance. Yet various schemes exist that are viable, benefit-
ing both the institutions and their clients. Such schemes
have generally served two major purposes-
1. They have contributed to loan security;
2. They have served as instruments of resource mobiliza-
tion.
The greatest challenge for micro-insurance lies in the com-
bination of viability and sustains ability with outreach.
Although introduction of sound practices such as appropri-
ate policy sizes and timely payment of installments of pre-
mium or positive incentives to renew on time in order to
avoid policy lapses can be feasible; the ultimate effective-
ness of interventions focusing on institutional transforma-
tion and sound insurance practices will vary considerably,
Life's most persistent and urgent question is, 'What are you doing for others?'
Life Insurance Today February 2016 9
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