Micro insurance is believed to work as a powerful risk management tool for low income and vulnerable groups by preventing them from falling into the poverty trap. But not much is known about outreach and efficacy of micro insurance across regions and groups. The present study has attempted to analyze micro insurance in India under Partner - Agent Model where, insurers utilize MFI as intermediary or delivery channel to provide sales and basic services to the clients with lower administrative cost. The present study is based on primary field survey covering 43 micro credit clients randomly selected from Bihar & UP. The analysis of micro insurance has been made mainly on the basis of information collected from select MFIs and household data with focus on Literacy, Level of Education, Employment & Saving Pattern (MFIs & Non MFIs).
However, findings of our analysis do not support the argument that a household‘s risk assessment and experience of shocks has a direct correlation on household decision to participate in insurance market. Households exposed more to risks are less likely to use available formal insurance products than others. Some lower income groups feel that use of insurance product as an additional risk as they have to pay premium regularly. Their poor understanding about the functioning of insurance services and lack of trust on the staff of insurers drives them away from insurance.
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