Microinsurance products are relatively new in the world of financial services for the poor and are not yet widely available. Even where microinsurance is available, it is often limited to credit life insurance. Given both the novelty and scarcity of microinsurance products, it is not surprising that market research in a number of countries has found that poor people have a low understanding of insurance. This is an obstacle to the expansion of microinsurance outreach. When potential customers do not understand microinsurance, they are not likely to use these products to their full advantage.
The objective of the financial education activity is to prepare future policy holders to be informed consumers of microinsurance products. Financial education will impart the knowledge, skills and attitudes necessary for the successful use of microinsurance products. Materials and trainings are designed using adult learning techniques and are appropriate for less literate audiences.
To select the most appropriate financial products, clients need to understand their features, how to calculate and compare their costs and benefits, and how to determine what products they can afford. By teaching good money management practices, financial education enables poor people to better manage their resources, understand their financial options, and improve their well-being. For the providers, an informed customer makes for a better bottom line. Financial education is thus a win-win investment for both users of microinsurance and the providers.
Link: „Risk Management” training
