Health insurance provides coverage against diseases and accidents causing physical injuries. MFIs have realised that the costs entailed by health problems often cause credit defaults, thus preventing people from improving their life conditions.
Health insurance is a complex product. It covers a broad variety of risks that can happen repeatedly. Health insurance involves external health-care providers, which makes it very difficult to implement. Fraud risks (false incidents, over-invoicing) are also significant and require preventive measures that are quite often sophisticated.
Finally, the organisation should reach a critical size very quickly so that it may mutualise the risks sufficiently. In spite of those difficulties, some exciting experiences exist, including in Africa (mutualised health insurance).
Therefore, several MFIs have either launched their own health care programmes or referred their clients to existing programmes. The effective coverage is diverse, but insurers usually cover a limited amount of hospital charges for a disease as well as the price of medical consultations and medicine.
Some insurers also provide first-aid or awareness services: vaccination and contraception, for example.
Source: Text based on Dossier thématique Micro-assurance ©2007, www.lamicrofinance.org