In many parts of the world health and accident insurance is taken for granted, but for people living in areas of rural poverty, it can be an unimaginable luxury. VisionFund is working to develop a new model of microinsurance that ensures those living in poverty can find a safer place to land during times of crisis.
Health and Personal Accident Microinsurance
Many studies have shown that poverty and poor health worldwide are inextricably linked. The causes of poor health for millions globally are rooted in political, social and economic injustices. Poverty increases the chances of poor health, which in turn, traps communities in poverty. Infectious, neglected and often preventable tropical diseases kill and weaken millions of the poorest and most vulnerable people each year.
For VisionFund clients, and for people living in poverty in developing countries more broadly, an accident or injury can also be financially devastating. Without insurance, the cost of medical care and the suspension of normal economic activities can lead to debt. And, if a loan has been taken, missed repayments due to poor health can also lead to a refusal from lenders to provide further lending, making it harder to break the cycle of poverty.
Health and Personal Accident microinsurance offers a promising way to mitigate the financial risks of ill health and provides hope that those living in poverty will receive reliable, adequate access to affordable health care. With an insurance product providing peace of mind for financial matters, our clients and their families can focus on the health and well-being of their loved ones.
Personal Accident Insurance
At VisionFund, a Personal Accident Insurance product is currently being designed to provide borrowers and their families with 24-hour financial protection against accidents.
With a very low yearly premium, this insurance will be affordable to all our clients who have taken a loan with VisionFund, protecting them and their loved ones’ financial futures in case of an accidental injury, disability or death. This can include a small payment to help with hospital or funeral expenses, or other medical needs. In most cases, VisionFund will pay for the upfront costs of purchasing insurance from a third-party supplier, so as not to put pressure on households to pay a lump sum. The premium repayments will be added onto the regular loan cycle, allowing clients to pay a small extra cost with their normal loan repayments. Personal Accident Insurance will be the entry product for our personal line of insurance, an easy to understand product providing peace of mind to vulnerable households.
VisionFund is aiming to introduce broader health insurance products to our clients and beneficiaries over the coming 12 months.
VisionFund will offer medical expense coverage linked to a disease or a hospital stay, such as for maternity and delivery costs, for a small premium. Through partnerships with insurance providers and health facilities, we will improve access to health facilities for our borrowers and their families. We will develop recommended standards that health facilities should fit to be part of the network proposed to our clients.
We are also working alongside our parent organisation, World Vision, to develop pilots for microinsurance that integrate with World Vision’s development work. In four countries in Asia and Africa, we will pilot a health insurance product for World Vision’s most vulnerable sponsored children in 2020.
Looking to the Future
VisionFund is working alongside our microfinance institutions to launch the right health products for our clients’ needs in each location. VisionFund is committed to developing products based on the capacity of our clients to access affordable insurance products that meet their immediate needs. Over time, we’ll be developing enhancement offers to basic health services to create more customised solutions.
World Vision’s Savings Group model will also benefit from our Personal Accident product in the near future. By charging a small premium to the group’s pool of savings, the whole group can benefit from coverage if one of their members becomes ill or passes away, unable to contribute to the savings pool or repay their loan from the group.