Micro-Insurance: Small Premiums With Long Term Benefits For Women

Salima’s husband was an outgoing man and a prominent member of his community. The couple lived together on a farm in a village outside of Nairobi, where they worked hard to support their seven children and five grandchildren.  In August 2009, Salima’s husband was admitted to the hospital and one month later he passed away.

Coping with the emotional shock that accompanies the death of a life partner can be staggeringly difficult. Coping with the financial shock at the same time, however, can make the situation seem unbearable. Typically, a Kenyan woman in Salima’s circumstances would have two options to cover the hospital and funeral expenses: take out a high-interest emergency loan, or approach friends and family for money.

Salima had a different alternative. When her husband was admitted to the hospital, she was informed that he had bought health and life insurance two months earlier. The policy paid out $330 USD to cover hospital bills, a weekly stipend of $25 USD for the family’s living expenses during the hospitalization (which Salima used to continue paying the children’s school fees), and $400 USD toward the funeral, which was attended by over 1,000 people. She’s now learning how to run the farm on her own and grateful not to be in debt.

Salima’s story is certainly the exception among poor women struck by crises.  Micro-insurance aims to help low-income people manage risk and reduce their vulnerability to shocks.  However, it’s estimated that only three percent of low-income people in the world’s 100 poorest countries benefit from a micro-insurance, leaving approximately two billion people unprotected. Of those two billion, more than half are women.