- Comparing the premium paid to the benefit received suggests that the five life microinsurance products that we studied all had similar value, but a more careful analysis of the “math” and context reveals that they had very different value to clients, and that their value emerged in different ways.
- Microinsurance helped the insured in our studies to avoid some of the most burdensome financing strategies, especially where coverage was greater; elsewhere, the differences in financing between the
insured and uninsured were less stark.
- Families and communities can provide a great deal of support in some contexts, in covering the immediate costs of a funeral, but they are generally less available for the ongoing needs of a family after the death of a breadwinner. In other contexts, family and community play a limited role after a death, even in covering immediate costs.
- Timing matters and influences the value of insurance in multiple ways:
- When benefits are paid greatly influences how they are used. Changing the timing of payments can change how much and what type of value products have, even without changing coverage.
- We find some initial evidence of a “bigger box” effect: insured families tended to spend slightly more on average than uninsured when funding (including insurance benefits) is made available to them at the time of a funeral.
- In-kind microinsurance is fast, easy, and seamless, allowing insurance beneficiaries to avoid inefficient churning of financing mechanisms while waiting for insurance payouts. However, cash policies can be more flexible, allowing beneficiaries to cover needs beyond funerals, which some clients may find more valuable.
Coping with the Many Costs of a Death: Consolidated Lessons of MILK’s Client Math Studies of Life Microinsurance
1 November 2013
Coping with the Many Costs of a Death: Consolidated Lessons of MILK’s Client Math Studies of Life Microinsurance