AN ANALYSIS OF MICRO INSURANCE

The lowest level of population pyramid is the segment, consisting of more than 3.5 billion of people. These people earn less than Rs.200 a day and are termed as poor or low income people. Due to insufficient income and inadequate savings these people mainly face two types of risks: (i) related to property and (ii) related to body. These people constitute an untouched market of insurance but given proper guidance, proper channels and right products, even they can form a significant part of the insurance market in terms of demand. To boost this segment to purchase insurance policies is to facilitate them with a product in which the terms and conditions are modified to suit their needs. This product is capable to tap the rural market and is called 'Micro insurance'. The article also stresses the obstacles faced and the benefits of the same.Microinsurance is a tool for increasing economic growth and development by providing small scale, low premium insurance policies to members of the poorest strata of society in the developing world. In this paper, I will be focusing on the ways in which micro insurance programs, Micro-insurance delivery models, how government helps, Micro insurance Products, Challenges and suggestions.