Why Micro-Insurance is needed for an Aatma-nirbhar and Bhavi Bharat

The future (Bhavi) Bharat will be bright only if every citizen will have security. Security of finances, health, valuable assets etc. As a developing nation, we are already making some great advancements, especially, in the urban sectors. Imagine, the kind of growth if we pay attention to the rural areas as well, and if not less, they approximately 500 million, which is, one-third of India’s entire population.Also, people in the rural areas are the most in need when it comes to having an insurance cover, on the contrary, they are the least insured population in India. Living with paucity of resources and wealth, it becomes imperative for such people to have proper covers around. Looking into the same scenario, the Insurance Regulatory and Development Authority (IRDA) passed the IRDA Micro Insurance Regulations in the year 2005.What is Micro-Insurance?Insurance plans specially created for the rural population (Regions with less than 5000 population) to meet their needs and secure their assets and life at affordable plans, the Micro-Insurance concept, is made to bring a change for a Bhavi Bharat by IRDAI.What makes Micro-Insurance different, and how is it made to help the needy? – Salient Features.Micro-Insurance comes in 2 types – Life and General Insurance plans.To ensure affordability for the poor, the sum insured under micro insurance plans is restricted to up to INR 50,000.Micro-Insurance agents have been appointed, especially for the mission to be accomplished. They will only be working on micro-insurance reach-out.IRDA has made it mandatory for life and general insurance companies to sell a specific portion of micro insurance policies every year. This has been done to promote the penetration of micro insurance in the rural sector which would create social welfare. As such, insurers are supposed to source a part of their business from rural sectors.How will Micro-Insurance benefit the poor?Health insurance plans ensure the poor to avail best of medical facilities and ensure healthy life with better lifestyle.Crop insurance is set to protect the farmers in case of any damage due to natural calamity etc.Life insurance takes care of the family in terms of food and regular income in case the bread earner passes away.Some savings-oriented plans also help them to organize the finances in a better way and do mindful savings.Accidental Insurance helps the poor to manage finances and claim for their health and vehicles.Looks like a great initiative by IRDAI, set to provide best of insurance covers across the remote segments of the nation, but still, what’s lacking?The penetration!Yes, till 2022, we see that villagers are not open to buy insurance. Why?Lack of awarenessMis-selling causing them not to trust againPerception that insurance is cost not an investment for future safety.And many more reasons.Though IRDAI has already started with special awareness camps and is encouraging micro insurance agents and POSP model of distribution is a step in this direction. Looking forward to when the entire India will be secured, because this is one of the most important factors for our economy to improve itself and move towards a developed nation.Micro Insurance, if advertised and sold at affordable prices with good service standards, may be a game changer for the insurance industry in general and act as corporate social responsibility in case insurance companies and intermediaries service these policies with sincerity and dedication. Large volume with low ticket size will make it self-sustaining and affordable for people living in Bharat.[/talkie]

The future (Bhavi) Bharat will be bright only if every citizen will have security. Security of finances, health, valuable assets etc. As a developing nation, we are already making some great advancements, especially, in the urban sectors. Imagine, the kind of growth if we pay attention to the rural areas as well, and if not less, they approximately 500 million, which is, one-third of India’s entire population.

Also, people in the rural areas are the most in need when it comes to having an insurance cover, on the contrary, they are the least insured population in India. Living with paucity of resources and wealth, it becomes imperative for such people to have proper covers around. Looking into the same scenario, the Insurance Regulatory and Development Authority (IRDA) passed the IRDA Micro Insurance Regulations in the year 2005.

What is Micro-Insurance?

Insurance plans specially created for the rural population (Regions with less than 5000 population) to meet their needs and secure their assets and life at affordable plans, the Micro-Insurance concept, is made to bring a change for a Bhavi Bharat by IRDAI.

What makes Micro-Insurance different, and how is it made to help the needy? – Salient Features.

1. Micro-Insurance comes in 2 types – Life and General Insurance plans.
2. To ensure affordability for the poor, the sum insured under micro insurance plans is restricted to up to INR 50,000.
3. Micro-Insurance agents have been appointed, especially for the mission to be accomplished. They will only be working on micro-insurance reach-out.
4. IRDA has made it mandatory for life and general insurance companies to sell a specific portion of micro insurance policies every year. This has been done to promote the penetration of micro insurance in the rural sector which would create social welfare. As such, insurers are supposed to source a part of their business from rural sectors.

How will Micro-Insurance benefit the poor?

1. Health insurance plans ensure the poor to avail best of medical facilities and ensure healthy life with better lifestyle.
2. Crop insurance is set to protect the farmers in case of any damage due to natural calamity etc.
3. Life insurance takes care of the family in terms of food and regular income in case the bread earner passes away.
4. Some savings-oriented plans also help them to organize the finances in a better way and do mindful savings.
5. Accidental Insurance helps the poor to manage finances and claim for their health and vehicles.

Looks like a great initiative by IRDAI, set to provide best of insurance covers across the remote segments of the nation, but still, what’s lacking?

The penetration!

Yes, till 2022, we see that villagers are not open to buy insurance. Why?

1. Lack of awareness
2. Mis-selling causing them not to trust again
3. Perception that insurance is cost not an investment for future safety.

And many more reasons.

Though IRDAI has already started with special awareness camps and is encouraging micro insurance agents and POSP model of distribution is a step in this direction. Looking forward to when the entire India will be secured, because this is one of the most important factors for our economy to improve itself and move towards a developed nation.

Micro Insurance, if advertised and sold at affordable prices with good service standards, may be a game changer for the insurance industry in general and act as corporate social responsibility in case insurance companies and intermediaries service these policies with sincerity and dedication. Large volume with low ticket size will make it self-sustaining and affordable for people living in Bharat.