Page 20 - Life Insurance Today June 2015 SAMPLE

A SNAP SHOT ON

MICRO INSURANCE

IN INDIA

M. J. Senthil Kumar Dr. P. Sundara Pandian

&Associate Professor Principal,

Department of Commerce (UG) VHNSN College (Autonomous),
Sri Kaliswari College (Autonomous), Virudhunagar.

Sivakasi

Introduction challenging. In India social protection being a concurrent
subject, it has its own political economy. So in the absence
Risk is pervasive in the lives of poor and low-income groups. of a dependable social protection, the importance of micro
Economic, social, natural, and other factors distort insurance becomes interminable.
household's risk management capability and their struggle
to come out of poverty. Faced with multiplicity of risks, poor Micro Insurance
and weaker sections are often forced to deplete their
financial, physical, social and human assets just to cope with Micro insurance is a means of financial protection that
the contingencies. Micro insurance can play a crucial role targets low-income communities generally excluded from
as a comprehensive tool to reduce poverty, inequality and public and private schemes. Protection is provided in
vulnerability, particularly where public social protection exchange for regular premiums proportionate to the
measures are inadequate and unevenly distributed. likelihood and severity of the risk involved. The types of
products offered typically range from health, life, livestock,
Micro insurance is designed for the protection of low- crop and weather insurance.
income people to cope with common risks, it can also strive In simple Micro insurance refers to insurance designed to
to cover the excluded such as poor, women and workers in protect under-served low-income people against specific
informal sector. In many developing countries like India, the perils in exchange for low premiums.
proportion of informal workforce in total workforce is
substantial and there is increasing tendency towards casual Motto of Microinsurance
nature of labour.
The main aim of the Micro insurance is to reduce the
Under this situation, it becomes daunting task on the part vulnerability that poor households face and as a
of the government to provide social security to all. About consequence, enable the poor to improve their lives.
90 percent of the working population of India is employed
in the informal sector and about thirty percent of the Micro Insurance Products
unorganized workers are very poor who need public social
security supports. The insurance companies offer composite covers or
package products based on the catering needs of the poor.
Although current social protection measures consist of The main products are as follows.
health, disability, death, old age and economic risks are
prioritized, its funding and implementation remain 1. Protection (Term insurance)
This scheme provides accident benefit. In addition to

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16 June 2015 Life Insurance Today

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