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Microinsurance: A Much Affordable Option

Insurance, everyone needs them but not everyone can afford them. For the most part, people are conflicted whether or not they should get one, as the application and approval process gets a bit confusing after a while. Nonetheless, there is a far better alternative for those who wouldn’t want to get hassled in attaining a proper insurance plan. If you’re not updated on the latest trend, there is no need to look any further than microinsurance. You may ask, “What is microinsurance? What are its advantages over the usual insurance? How do I get one?” These questions are best answered with these following information. Get your pens out and take notes as we’ve got you covered:


What is Microinsurance?

Microinsurance is defined as an affordable alternative against specific perils in exchange for regular premium payment proportionate to the likelihood and cost of the risks involved. This is typically offered to the working class who may not be able to afford the premiums of a regular insurance, due to the rate difference. Of course, the scope of coverage may vary, however, the purpose is still the same, for people to get a financial assistance in times of need and calamity. The term “need” and “calamity” may also have varying definitions and interpretations, but those who have microinsurance shouldn’t worry as, in spite of that, they would still reap the full benefits of their chosen coverage package.


What are the differences between a Microinsurance and a Traditional Insurance?

Of course, there are significant variations between traditional insurance and microinsurance. Their general purpose are similar in perspective, but dwell deeper into their structure and you may find that one is definitely unlike the other. Here are just a few examples:

1) The intended clients – Microinsurance focuses on individuals with no insurance awareness. There is a reason why it’s a more affordable choice, due to the fact that microinsurance establishments aim to make it more accessible towards our fellow Filipinos who aren’t even aware that such services exists. These establishments are aware that the mere concept of getting insured isn’t exactly a well-conceived notion for many, hindered by the higher rates of traditional insurance. Speaking of which, the opposite can be said about traditional insurance, with the intended clients to be people who are well aware of their options and are willing to shell out a lot for any form of coverage.

2) The simplicity of contents – Simply put, microinsurance features are easier to understand. Microinsurance establishments are less about the complications and more about the understanding of their clients, hence, if you’re going to apply for one, you’ll be surprised at how easy it is to learn about the ins and outs of the coverage that you’re planning to acquire.

3) The pricing – If you’re going to apply for a microinsurance coverage, fear not about the prices, as they are definitely way lower than traditional insurance. You do not need to spend thousands just to have a modest coverage or plan, all you need to do is to discuss your options and choose from a wide range of premiums.

4) The requirements – This is one of the main reasons why most people aren’t too enthusiastic about getting insurance, due to the fact that the mere application itself would require lots of paperwork and documents. Especially in a country such as the Philippines, the amount of processing time just for the requirements alone would really test your patience, having to fill up countless forms, just to stand in line thereafter, then be told to come back another day due to an unfulfilled checklist of documents which you may or may have not even come across before.

5) The collection period – Microinsurance payments are mostly collected every week, with some even on an irregular basis. The opposite can be said about traditional insurance, where they collect annually or every month, which would then coincide with some due date bill payments, leading to a more expense-filled week.

6) The damage assessment – Both microinsurance and traditional insurance have that general aim of providing financial assistance when a client experiences a sudden roadblock, either in the form of illness or calamity. However, the way that they assess these situations vary to a certain degree. For example, microinsurance has a simpler and faster method of assessment than a traditional insurance, so you wouldn’t have to wait long in times of emergencies, unlike the typical insurance method which would require several documents as proof, in turn using up an extended period of time for the process to be completed.


What coverage and premiums may a microinsurance offer?

In spite of the fact that it is a more affordable option, it still offers a lot of perks that may cover various aspects of a client’s everyday life. Whether they’re at work, at school, or even when they’re home, they can still enjoy the premiums that microinsurance has to offer.

1) For students – All parents are concerned about the safety and well-being of their kids, hence, why it would be a good choice to sign them up for a student premium. During their time inside and outside the classroom, anything can happen. Accidents during play may occur and such may bring a sudden influx of expenses. A student premium would definitely help out with that. Some premiums would even allow parents to sign up their kids as early as 4 years of age.

2) For employees – Going from young kids to adults, an employee coverage works in a similar style as a student premium, with the main difference of sudden occurrences happening within the workplace rather than a school ground. Simply put, it covers accidental death, Disablement & Dismemberment (ADD&D), accidental medical cash aid, burial benefit (accident/sickness), Unprovoked Murder & Assault (UMA), motorcycling and personal liability. Now, that’s what you would definitely call a complete coverage.

3) For automobiles (personal vehicle) – Basically, microinsurance does not limit its services towards humans alone, it also protects your car. A standard vehicle coverage covers Own Damage (OD), theft, loss and/or damage, Excess Bodily Injury (EBI), Excess Property Damage (EPD), and Acts of God/Nature (AOG/AON). Now, having your vehicle repaired wouldn’t be too much of a hassle (as long as they’re within the given set of premiums).

4) For your home – The Philippines itself is one of the most calamity-prone countries in the world. There are certain months in which we’d be hit with two or more storms in succession, hence why a microinsurance premium aiming to provide coverage for our home is definitely well needed. The average premium offers loss protection to buildings and residential dwellings including their contents against perils of fire, lightning and other allied perils such as earthquake, typhoon and flood.

With all of these in mind, it may be no surprise that you’re weighing in your options, analyzing which establishment would be best for availing a well-trusted microinsurance premium and coverage. Look no further than with Cebuana Lhuillier’s Microinsurance Services, affordable insurance products to help Filipinos avail of financial services and privileges that higher-income earners have easy access to, with innovative microinsurance products and services that promise to minimize impact of distress and misfortune on one’s financial position. Feel free to visit your nearest branch for more information.