Performance of micro insurance policies with respect to life insurance corporation of India

Abstract

Risk is persistent in the lives of poor and low-income groups. The economic, social, natural and other factors distort households’ risk management capability and they struggle to come out of poverty. In India the insurance sector is penetrating in a faster pace in the rural and vulnerable sections of the society. Micro Insurance policy is for low income people living in rural areas with no knowledge and awareness of insurance. They are the people who tend to face more risk and are more prone to illness due to working in hazardous condition or malnutrition with little or no experience in dealing with financial institutions. Micro Insurance in India has made a steady progress with increase in Life Insurers, new products, strengthened infrastructure every year. Though there is a growth in the Micro Insurance but still India has very low Insurance penetration. Two third of world’s poor are in India and hence there is a huge need to improve financial security for these low income people in the country. Micro Insurance can be one of such tool that can mitigate the risk for low income group. Though there is a growth in the Micro Insurance but still India has very low Insurance penetration. The main objectives of the study are to study Micro Insurance market in India, and the performance of micro insurance policies with respect to Life insurance Corporation of India. Analysis is based on secondary resources and study is limited to growth in micro insurance sector post liberalization in India. The development of micro insurance is both a moral and an economic imperative, not only for achieving the inclusive financial systems but also for the equitable mitigation of risks.