Microinsurance

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Can it really help?

Can microinsurance really help reduce and resolve the issue of poverty?

One of the most critical issues facing the poor is the fact that their incomes are not only very low but are also very unstable. For such households, loss of income due to getting sick, becoming disabled and not being able to work, and the death of the bread winner of the house, etc. could cause devastating damage to the family°«s finances.

On the other hand, in developed countries, social security systems work as a buffer against and absorb shocks from these events to a considerable extent. However, such public schemes are not available in many developing nations. Therefore, microinsurance can play an important role in safely taking risks and effectively cutting the vicious cycle of poverty, supporting the lives of the poor until they can get back on track.