Micro-insurance: An innovation in protecting poor communities

Micro-insurance seeks to address the insurance dilemma for the poor whose risk coping mechanisms outside any form of insurance threaten to perpetually keep them in poverty. Despite its increasing appeal, micro-insurance is yet to achieve mass acceptance in the market due to the low levels of awareness and understanding of formal insurance. PHOTO BY MICHAEL KAKUMIRIZI

What you need to know:

If you are one of those people who think that it is a waste of time trying to insure the poor, then you are in for a surprise. In any case, they have very low incomes and no assets to write about. Micro-insurance seems to be one of the latest innovative ideas that promise to dispel that myth, Joseph Lutwama writes

The definition of micro-insurance has evolved over time, one of the latest versions is provided by the International Labour Organisation Micro-Insurance Innovation facility. It defines micro-insurance as a mechanism to protect poor people against risk (accident, illness, death in the family, natural disasters, and so on) in exchange for insurance premium payments tailored to their needs, income, and level of risk.

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