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Microinsurance To Be A Reality Soon

In a remote village in Punjab, Mohan Singh goes to a kirana store a few grocery items. Along with the grocery items, Mohan also purchased a Rs 30 insurance for his cow for 20 days because he heard of a cattle disease in nearby village because of which two sheep had died.

This is a classical example of microinsurance for property, which can also include livestock. According to Wikipedia, Microinsurance is protection of low-income people against specific perils in exchange for regular premium payment proportionate to the likelihood and cost of the risks involved. Insurance regulatory and development authority (IRDA) defines microinsurance as low premium and low caps/coverage. According to IRDA Microinsurance Act 2005, general micro-insurance product means any health insurance contract, any contract covering the belongings, such as hut, livestock or tools or instruments or any personal accident contract, either on individual or group basis.

IRDA has proposed that Standard microinsurance products would be available in India by March 2013. Microinsurance, per se, is not new to the Indian society. Products from insurance companies such as Bajaj Allianz, ICICI Prudential, LIC etc are already available in the market. However, over the counter selling of microinsurance products is not available. With standard microinsurance products, farmers will be able to purchase such products from over-the-counter shops such as village kirana store.

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Authored by: BuySmartPolicy
Published date: March 28 2018.

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