Health and Accident Insurance
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 has developed 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.
The recent sanitary crisis during COVID-19 shows again more clearly how important it is for our communities to be covered for medical costs (health insurance) and/or for loss of income (hospitalisation cash benefit).
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 provides borrowers and their families with 24-hour financial protection against accidents.
With a very low yearly premium, this insurance is 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 pays 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 can be added onto the regular loan cycle, allowing clients to pay a small extra cost with their normal loan repayments. Personal Accident Insurance is the entry product for our personal line of insurance, an easy to understand product providing peace of mind to vulnerable households.
VisionFund has introduced broader health insurance products to our clients and beneficiaries.
VisionFund offers 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 improve access to health facilities for our borrowers and their families. We 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, on pilots for microinsurance that integrate with World Vision’s development work. In four countries in Africa, we are piloting a health insurance product for World Vision’s most vulnerable sponsored children and clients of savings groups throughout 2021.
Looking to the Future
VisionFund continually works 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 is also benefitting from our Personal Accident product. 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. A Health product can be added as a top-up to offer more protection to beneficiaries of World Vision.
Savings Linked Insurance for Resilience Report
For the past two years, VisionFund has piloted the provision of health microinsurance to World Vision Savings groups in Ghana and Malawi through funding and support by The Swiss Capacity Building Facility. This report summarises the results of the pilot, the evaluation process, learnings and next steps.