Micro-Insurance: Role and Issues During the COVID-19 Crisis

Abstract

This paper analyses the role that micro-insurance can potentially play in reducing economic vulnerabilities of lower income households during the COVID-19 pandemic. It uses a theoretical framework derived from studying relevant literature on the subject. The framework was used to identify ways in which various shocks exacerbate economic vulnerabilities of the poor and perpetuate their poverty.It also formed the basis for understanding how microinsurance insulates them against such shocks. The paper has found that there are a host of micro-insurance schemes available for shielding the poor against death, disability and crop failures. However issues such as financial illiteracy and lack of financial inclusion continue to remain as hindrances.