These days, life has become challenging and hectic for everyone residing in urban and rural India. While a large section of people can afford life insurance, there are many in the bracket of weaker sections who find this a daunting task. With a booming insurance sector is there any space for these potential buyers? Yes. Micro life insurance plans are the correct answer as these are designed to cater especially to those who are in the lower income group.
As compared to conventional life insurance covers, these policies offer a lower coverage to the policyholder, in terms of a low premium. Even the sum assured sum of Rs. 50,000 or lesser depending on the type of plan opted for. But the policy holder has the option of availing other benefits. These include protection against accident, partial disability benefit and also death benefit. This does not require any access to banking or financial institutions. Typically these policies require three types of intermediaries for facilitating micro insurance. These comprise NGOs, self-help groups and the micro-finance institutions.
Anyone within 18-55 years of age bracket can apply for these plans. It is valid for domestic helps, vendors, agriculture and construction laborers etc.
i. This plan also includes health insurance contracts in its ambit, making it a win-win situation for the policy holder.
ii. The policy holder is provided a flexibility option. This means he can either choose health insurance or club it with general insurance for a dual benefit.
iii. Lower premium as compared to conventional life plans.
iv. Plans have been customized my many insurers to suit the needs of the policy holders in rural areas.
v. Accident Benefit is an important aspect of these plans. In fact, many insurance companies factor in the option of life risk with accident benefit to the policy holder. Also, various other permanent disabilities are also covered here.
vi. These plans are not complicated. Rather they are designed very simply to offer life insurance cover and also sum assured is given at the time of maturity.
vii. Typically, these plans do not expect the policy holder to undergo any medical tests.
viii. There is no prerequisite to buying these plans.
ix. Micro insurance plans also offer coverage for huts, livestock, instruments, etc.
x. These plans can be purchased on an individual cover or as a group cover.
xi. Depending on the type of insurer chosen, some of these plans come without accident benefit rider also.
xii. These plans are term insurance that comes either with premiums returns or without premium returns or can an endowment contract as well