Micro insurance means offering of insurance protection to low/irregular income households.

The distribution channel through which the insurance companies could reach out to their customers in the rural and social sectors comprises of Non Governmental Organizations (NGOs) Micro Finance Institutions (MFIs) Self Help Groups (SHGs) Micro Agents Cooperative Banks Regional Rural Banks (RRBs) Post Offices Banking Correspondents (BCs) Local Community Groups Credit Unions Health Care Providers Mobile Service Providers Anganwadi Workers Owners of individual Kirana StoresM.M .: Mercantile marine.

Micro insurance products are specifically designed to aim for the protection of low income people from rural and informal sectors. The low income people form a sizable part of our population and usually don’t have any health security cover. Therefore, this low value product with an affordable premium and benefit package is initiated to help these people to cope with and recover from common risks. Products come with a small premium and typically the sum insured too is below Rs. 30,000 as required vide IRDA Micro Insurance Regulations, 2005. Mostly such covers are taken on a group basis by various community organizations or non-governmental organizations (NGOs) for their members. The regulations also provide for a tie-up between a life insurer and a non-life insurer whereby a life insurer can offer a life micro insurance product as also a general insurance product and vice versa. In the case of claims arising on such products the life insurer forwards non-life claim to the non-life insurer for settlement.

Micro insurance products are specifically designed to aim for the protection of low income people from rural and informal sectors. The low income people form a sizable part of our population and usually don’t have any health security cover. Therefore, this low value product with an affordable premium and benefit package is initiated to help these people to cope with and recover from common risks. Products come with a small premium and typically the sum insured too is below Rs.30,000 as required vide IRDA micro insurance regulations, 2005. Mostly such covers are taken on a group basis by various community organizations or non-governmental organizations (NGOs) for their members.

The IRDA Micro Insurance Regulations 2005 allow three types of entities viz., Non-Governmental Organizations, Self Help Groups and Micro Finance Institutions to act as Micro Insurance Agent. Conventional insurance agents and brokers too are allowed to sell micro insurance. Micro-insurance Agency has been created keeping the special requirements of the segment in mind. Micro Insurance Agent shall not distribute any product other than a micro insurance product. A Micro Insurance Agent to work for only one life insurer and one general insurer. Micro Insurance Agent may employ specified persons with the prior approval of the insurer.

Basically refers to provision of financial services to poor or low income people. These low income people can be consumers who need loans for fulfilling their personal requirements or self-employed people who need loans to set up and sustain their business. The microfinance is to provide low income groups with a range of all possible financial services like credit, savings, accounts, insurance and investment products etc.