Enrolment in Micro Life and Health Insurance: Evidences from Sri Lanka

Identifying factors influencing microinsurance participation

This paper identifies determinants of households' participation in microinsurance. It is based on a survey of 330 MFI client households from Sri Lanka.

The paper presents a conceptual framework of microinsurance participation as discussed in literature. It uses probit models and multivariate probit regressions on survey data to determine factors that influence participation in insurance and usage of different types of insurance. Findings include:

  • Female headed households are more likely to enrol in MFIs and participate in micro health insurance than maleheaded households;
  • Household size is negatively linked to MFI membership, but positively associated with microinsurance usage;
  • U-shaped age pattern exists, i.e., household heads have a decreasing willingness to participate in insurance up to a certain age after which willingness increases;
  • Poor households are more likely to be excluded from the insurance market;
  • Education of household heads determines MFI membership and insurance participation;
  • Death or illness in the family is positively related to insurance participation.

The paper states that there is a strong need to extend geographical coverage and accessibility of microinsurance programs and adapt their features to the needs of the poor.

About this Publication

By Bendig, M. & Arun, T.