Pilot Test of Micro-Life Insurance Product: Results and Lessons Learned

This paper discuses a pilot microinsurance product that was introduced in Nepal to reach out to the poorest sections of society. The paper argues that although there are many insurance companies in Nepal, the majority of the poor population has not been covered against life-cycle risks.

The paper states that the micro-insurance project:

• Identified a group term life insurance as a micro-insurance product for MFIs clients;
• Had its objective as the development of at least one microinsurance product suitable for the poor people, especially women, in Nepal;
• Covered the clients, their spouses and parents, and insured them against both natural and accidental death;
• Followed the "partner-agent" model;
• Showed a growing trend in the number of women clients as the result.

The paper elaborates that though the product was innovative and was successful in helping the partner MFIs meet their social and financial objectives, yet the project faced challenges when it came to marketing the product, verifying progress with partners and the attitude of the MFI staff.

Some of the lessons learned were that:

• The product should be made compulsory for a while;
• Monetary incentives should be provided;
• Insurance courses would help the staff take the project on as a responsibility rather than as a burden;
• Proposal forms should be more concise.