In a context where unexpected events can undermine the financial stability of households and small businesses, microinsurance has emerged as a protection tool designed primarily for people with limited incomes. With generally lower premiums and coverage tailored to policyholders' needs, these products can help reduce the financial impact of unforeseen situations such as illness, accidents or property damage.
Beyond being a low-cost insurance option, microinsurance functions as an instrument of financial inclusion, broadening access to protection for individuals and small entrepreneurs who, for economic or other reasons, remain outside the reach of conventional insurance products.
What can microinsurance cover?
Microinsurance coverage varies according to the type of product contracted and the risks specified in the policy. In Mozambique, the regulatory framework provides for different categories of protection, which may be offered individually or in combination, within the limits established by law.
This diversity allows the products to address distinct needs, ranging from personal and family protection to coverage of specific assets and economic activities.
Coverage for individuals
Microinsurance products designed to protect individuals can cover risks related to health, accidents, and certain costs associated with the death of the insured.
The modalities provided for under the framework include:
Credit-linked life insurance: designed to guarantee repayment of loans granted within the scope of microfinance activities in the event of the insured person's death;
Funeral insurance: covering funeral expenses within the limits defined in the contract;
Health insurance: covering hospitalisation costs in accordance with the policy terms;
Personal accident insurance: designed to provide benefits associated with accident risks expressly covered under the policy.
Contracting one of these modalities does not mean that all related risks are automatically protected.
Before taking out microinsurance, it is essential to verify the coverage, exclusions, waiting periods, insured capital, and the conditions required to receive an indemnity or other benefit provided for in the contract.
Coverage for assets and economic activities
Microinsurance can also protect certain assets and activities against losses arising from events specified in the policy.
Within Mozambique's regulatory framework, these modalities include:
Fire insurance: protection of movable and immovable assets against damage resulting from fires covered by the contract;
Agricultural insurance: coverage of certain risks associated with agricultural production;
Livestock insurance: protection against specific risks related to livestock farming.
These modalities may be particularly relevant for smallholder farmers, livestock breeders and other economic operators whose activities are exposed to risks capable of jeopardising their income and livelihoods.
However, the existence of a coverage does not mean that all losses related to a given event are included. The protection depends on the risks expressly contracted, the exclusions and the limits established by the insurer.
Protection for the self-employed and small businesses
For self-employed workers and small entrepreneurs, selecting a microinsurance product should begin with identifying the risks most likely to disrupt business continuity or household financial stability.
A self-employed worker may, for example, seek protection against certain personal accidents, particularly when their income depends directly on their ability to work.
A smallholder farmer or livestock breeder may require coverage tailored to the risks of agricultural or livestock production. Meanwhile, the owner of a small commercial establishment may consider protecting certain assets against fire.
These needs call for distinct solutions, since not all products offer the same guarantees.
The choice should therefore take into account the nature of the activity, the risks to which it is exposed, the value of the assets to be protected and the financial capacity of the insured.
Before signing a contract, it is equally important to compare the available terms and conditions and to confirm that the insurer is duly authorised to market microinsurance products in Mozambique.
Source: Corretora Camargo
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/?p=557956
