What is Micro Insurance? Regions, Specialties and Operating Companies

Kathmandu: In general, micro insurance is insurance for low-income people against possible risks in the future.Micro insurance is an insurance aimed at protecting the life or property of such people who cannot face the risks due to low income, financial and social reasons.

Micro insurance is always affected by the concern of animal husbandry, medical treatment, concern of business and also the concern of children’s future, such people should use various programs of micro insurance. According to the ‘Ministry of Small Insurance, 2017’ issued by the Nepal Insurance Authority, small insurance is the insurance targeted at people of low income category. It has been divided into 2 parts as short term life insurance and short term non-life insurance.

Micro life insurance means micro insurance issued by an insurer doing life insurance business. In addition, “miniature non-life insurance” means mini-life insurance issued by an insurer engaged in the business of non-life insurance.

Micro life insurance means micro insurance issued by an insurer doing life insurance business. In addition, “miniature non-life insurance” means mini-life insurance issued by an insurer engaged in the business of non-life insurance.

At present, four micro insurance companies are operating in Nepal. In which 2 small life insurance companies and 2 small non-life insurance companies are operating. In terms of short term life insurance, there are Guardian Micro Life and Crest Micro Life and Nepal Micro Insurance and Protective Micro Insurance Company under Short Life Insurance.

The government has launched a micro-insurance program for Nepali citizens who do not have the financial capacity to insure themselves in low-income life insurance and non-life insurance companies. There are many features of micro insurance. Some of the important features that you should know about are as follows.

– Insurance claim process is simple and short- Small savings to pay the insurance fee- Insurance of simple nature- Fewer exceptions-Less paper process- Don’t have to worry too much about insurance- Insurable for small amounts

The mini insurance program is aimed at the categories that are not covered by other insurance policies or are not accessible. Micro insurance is a program that helps in reducing possible risks that may occur in the daily life of communities living in rural areas who cannot be covered by the scope of insurance and earn a living with low income. If such programs can be made successful, common people can be brought under the ambit of the insurance sector. Sector of micro insurance Just as there was a problem in implementing agricultural insurance in the past, there may be some difficulties in implementing the micro insurance policy. For this, the insurance authority should make extensive publicity and on the other hand, make special arrangements to reduce the cost of such insurance.

Insurance is a business based on trust. Insurance education is even less in the low income category. They are forced to bear more risk, but it seems very difficult to motivate them to take insurance. The insurance market concentrated in the city will also expand in the rural areas. The insurance fee is also very little. Getting cheap insurance is a good opportunity for the poor. It seems very challenging to implement insurance schemes in villages. First, the cost of companies is higher.

Therefore, there should be a system to reduce their costs. It may include not only grants but also options such as tax exemptions. Since the poor will benefit from the micro insurance program, it should be linked with the poverty alleviation program.

Insurance market is abundant in Nepal. There is also a lot of potential for micro insurance because most of the people live in rural areas. You should be able to explain to them the fact that they have to pay a nominal premium and in case of damage they will get a lot of compensation.

Even when the government arranged subsidies for crop insurance, companies and farmers were not attracted much. However, when the system of subsidy was arranged, the insurance also started to increase. It is difficult for companies to spend on advertising. Therefore, it seems necessary to mobilize a fund of 1 percent of the insurance fee collected by the insurance authority from the insured.

The companies are raising their voices saying that they are not able to do it for the promotion of insurance. If micro insurance can be promoted in the villages with the funds of the insurance fund, this plan will be successfully implemented and help in the poverty alleviation program.