Microinsurance

Microinsurance at SAJIDA

Microinsurance, or inclusive insurance services designed for the poor, is a relatively new concept. The low income population struggle immensely to cope with the financial shocks related to health, death of a family member, children’s educational expenses, and disasters. In Asia, Bangladesh has the highest incidence of catastrophic health costs that often drive the poor deep into poverty by absorbing 10–40% of household resources and add 4% population or around 6 million people to the extreme poverty yearly. In an attempt to address this issue SAJIDA Foundation designed a comprehensive microinsurance product titled Nirapotta (Safety net), initially known as HELP, to provide social protection and security to its microcredit program members and their families. The insurance is designed to provide members financial protection during these basic lifecycle needs and includes coverage for health, death, education, fire, and legal aid. The Foundation also has microinsurance products for its microenterprise borrowers’ employees and cattle loan borrowers.

NIRAPOTTA Principles

  • Mutual as wells as Self Help
  • Integrated Services – all major protection under one roof, insuring the Future…Today
  • Sound Insurance principles of Indemnity and Loss Minimization

SAJIDA Foundation is the first organization in Bangladesh that provides preventive and curative healthcare to the poor through a microinsurance system. The government of Bangladesh has set a goal to attain Universal health overage by 2032. The strategy is to halve current out-of-pocket (OOP) expenditures of 64%, to reduce number of households facing catastrophic to 0% from current level of 15% and to increase prepayment funds like discount card/insurance for health benefits to 68% from 0%. Our Nirapotta program has already started providing health care services in-line with that strategy. In the process, our members will have access to quality but low cost health care without relying on exploitive health service bearing relatively high cost.

NIRAPOTTA (Safety net)

The premium charged for Nirapotta ranges from BDT 250 to BDT 1,050, depending on the amount and tenure of loan. Additional premium of BDT 20 to BDT 100 is charged for each supplementary loan borrowed by Nirapotta members. Its components include:

Health Insurance

Health insurance is a major component of the microinsurance program. It provides predetermined monetary support to the microcredit borrowers and their families for most of the major medical services. Insured members receive a lump sum amount for any operation/surgery, hospitalization, antenatal care (ANC), child births, bone fractures, respiratory problems, among others. Natural child births, and cataract surgeries is absolutelyfree of cost at SAJIDA Foundation hospitals.

Life & Loan Insurance

The life insurance component provides financial support to the families of members in the event of the death of an adult family member and waives SAJIDA Foundation issued loans, if any. Loan balance waiver is provided upto a maximum of BDT 39,000. BDT 5,000 cash benefit is provided in the event of death of the member or his/her spouse.

Education / Scholarship

The aim is to groom talented children as future leaders. One child from each family is eligible for up to BDT 500 per month given that the child meets the eligibility criterion and maintains satisfactory progress. For higher studies, all academic expenses are covered for scholarship holders.

Fire/Man-madeDisaster Insurance

This component entitles the policy holder to BDT 10,000 to cover damages to a home or work place in the event of a fire or man-made disaster.

Legal Program

The legal component under Nirapotta makes a lawyer available at least once a month at every microcredit branch to provide consultation and guidance on legal issues. No financial support is provided under this component.

Microinsurance for MicroEnterprise borrowers’ employees

SAJIDA Foundation, in coalition with Milliman, a renowned international actuarial and consulting firm, has designed a microinsurance product for employees of its microenterprise borrowers. This product offers fixed cash benefits under life and health insurance. It also covers a part of employee’s wage in case of an accident encountered at workplace resulting in taking time off from work. The product is not mandatory for microenterprise borrowers. An annual premium of BDT 260 is shared between employer (50%) and employee (50%). The components under this insurance package are:

Life Insurance

In the event of the death of the employee or his/her spouse, the family is entitled to a fixed cash benefit of BDT 5,000 under this coverage. This benefit has been incorporated keeping in mind funeral expenses.

Health Insurance

Health insurance is a major component of the microinsurance program. The insurance holder can receive monetary support up to BDT 4,000 for most major hospital services as outlined in the policy. Insured members receive discounted rates if they go to one of the two SAJIDA Foundation’s hospitals. Members are also entitled to consultations with general physicians, natural child births, and cataract surgeries, free of cost at SAJIDA Foundation hospitals. SAJIDA Foundation also organizes satellite health clinics in the areas where the microenterprises are located to provide basic healthcare to the employees. The satellite clinics are organized three times a year.

Accident and Disability Benefits:

If an employee suffers from an accident and/or disability caused by or at the workplace that leads to an inability to work, then, the employee can take partially paid leave of a maximum of 2 weeks during which 50% of his/her wage will be paid for.

Cattle Insurance:

Our cattle loan borrowers are covered under cattle insurance. Upon death of a cattle, 85% of the loan amount or cattle purchase price, whichever is lower will be waived. The premium is 0.70% of the loan amount, plus BDT 100 for veterinary services.

Microinsurance, or inclusive insurance services designed for the poor, is a relatively new concept. The low income population struggle immensely to cope with the financial shocks related to health, death of a family member, children’s educational expenses, and disasters. In Asia, Bangladesh has the highest incidence of catastrophic health costs that often drive the poor deep into poverty by absorbing 10–40% of household resources and add 4% population or around 6 million people to the extreme poverty yearly. In an attempt to address this issue SAJIDA Foundation designed a comprehensive microinsurance product titled Nirapotta (Safety net), initially known as HELP, to provide social protection and security to its microcredit program members and their families. The insurance is designed to provide members financial protection during these basic lifecycle needs and includes coverage for health, death, education, fire, and legal aid. The Foundation also has microinsurance products for its microenterprise borrowers’ employees and cattle loan borrowers