Microinsurance

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What types of insurances are needed most?

What types of insurance products do the poor need most?

The poor in developing countries work under severe labor conditions, and live in poor sanitary environments, exposed to more risks of contracting diseases and encountering accidents than those living in developed countries. However, the majority of the microinsurance products on the market are credit life insurance, sold along with microloans as a condition for lending.

Such types of insurance serve as collateral for the lenders in case the borrower dies before fully paying back the loan. In these situations the death benefits are not be handed over to the family of the deceased (only the balance after settlement is paid). Thus, in reality, microinsurance that truly serves the poor in sustaining their lives and their financial security accounts for only a small portion of the market.

The kind of microinsurance products that pay benefits to the poor when they need it the most should be developed and delivered to these people who are in need.