For many low income earners, one unexpected event e.g a sudden illness, an accident, a lost phone, a damaged property, etc, can disrupt everything.
Without a financial backup, situations like these often mean using up your savings, borrowing money, or struggling to cover your daily needs.
This is where microinsurance comes in: it gives you a simple and affordable way to stay protected when life doesn’t go as planned.
Who can have microinsurance?
Anyone can have microinsurance. But it is especially helpful for people who earn a low or irregular income, or those who have never had insurance before. This is why it is also known as inclusive insurance because it makes protection available to more people.
Microinsurance is seen as the first step towards including people who have never had insurance before. In short, it gives you support when you need it most, without requiring large payments.
How does microinsurance work?
Microinsurance is designed to fit your budget. It costs less than standard plans and is designed for people who need simple, honest protection. While the monthly payments are much lower and the plans are simpler, they still provide a vital safety net, in case of unexpected financial risks, such as illness, accidents, death, and loss of property.
Microinsurance works the same way as traditional health insurance: You pay a small amount regularly, and if something goes wrong, the insurance company supports you financially. Even though the plans are simpler, they still protect you against important risks like illness, accidents, or worse, death.
Why you need microinsurance
Financial protection
The main benefit of microinsurance is that it provides financial protection for low- and middle-income individuals who would not be able to afford traditional insurance.
Maintaining quality of life
When things go wrong, microinsurance can reduce risks and help you maintain your quality of life in unexpected, sudden situations. In this way, it gives you something to fall back on when things don’t go as planned.
Reduce poverty
Microinsurance helps prevent small problems from turning into bigger financial struggles. More people are turning to microinsurance because it simply makes sense for everyday life, especially in developing countries, where almost 90% of people don’t have access to insurance.
Conclusion
Unexpected events can happen at any time, but how you prepare for them makes all the difference. We’ve seen how microinsurance offers a simple and affordable way to stay protected.
At M-KOPA, we’ve partnered with Turaco Insurance to bring affordable health insurance to low-income earners in underserved areas across Africa.
If you’ve ever worried about how to handle unexpected medical costs, this is a simple way to stay protected. Contact us to get started.
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