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Microinsurance is the protection of low-income people against specific perils in exchange for regular premium payments proportionate to the likelihood and cost of the risk involved.

How does Microinsurance help Vulnerable People?
  • Microinsurance is intended to provide some stability to the financial situation of vulnerable, low-income individuals after a disaster through the injection of Microinsurance help vulnerable people quick liquidity, thereby allowing then to avoid adopting coping strategies that could lead them deeper into poverty.
  • It will help people whose livelihoods are affected, without them having to wait for help from “external” sources like the Government. It would enable farmers for example to have a source of immediate funding to undertake activities such as replanting, draining fields and reconstructing irrigation systems.
  • Could improve the credit worthiness of individuals in the long term, giving them access to financial services that they previously may not have had access to.
  • Microinsurance is a clear example of proactive planning for DRM at the individual level.