Microinsurance is not new in Bangladesh, but the general public know very little about it, although it can deliver much-needed cushion to the largely uninsured population in times of crises.

Microinsurance, which is inexpensive and protects people with lower incomes from economic shocks and prevents people from falling below the poverty line in times of crises, operates like a regular insurance scheme.

But it typically targets the segments of the society that are often ignored by mainstream commercial and social insurance schemes.

It deals only with marginalised, low-income and economically vulnerable groups by offering insurance plans tailored to their needs.

The solution provides an opportunity to the people living on $1 to $4 a day so that they can protect themselves or their families during any medical emergencies and other types of crises.

Microinsurance may cover various risks.

On the basis of risks, its products are designed as life microinsurance (and retirement savings plans), health microinsurance (hospitalisation, primary health care, maternity, etc.), disability microinsurance, property microinsurance (assets, livestock, housing), and crop.

Currently, the insurance system in Bangladesh consists of two state-owned corporations, 43 private general insurance companies, and 17 life insurance companies.

The companies concentrate only on the upper and middle-income groups, leaving an estimated 93 per cent of the population without access to formal insurance services.

Delta Insurance pioneered microinsurance in Bangladesh. Popular Insurance and FarEast Islami Insurance gained popularity by rolling out microinsurance.

Microinsurance is usually five years. If the policyholder is alive till the maturity of the policy, they will receive insurance money with a bonus.

But if he loses his two main organs completely or is unable to work by accident or death before the maturity of the policy, the next premium will be stopped automatically. The policyholder or their nominee will get 50 per cent of the insurance money immediately and the rest within the next six months.

Md Jalalul Azim, managing director of Pragati Life Insurance, said microinsurance is a DPS (deposit pension scheme)-like product.

It is sold like a conventional insurance policy. Sometimes it could be made on a partnership basis.

For example, an NGO can buy a policy for its members.

"They can deposit every month. There is no muck risk," Azim said.

Pragati Life Insurance's minimum deposit is Tk 5,000, and the maximum is Tk 25,000 under its microinsurance scheme. One can buy a policy for Tk 50 or Tk 100.

Jiban Bima Corporation started it in 2009-2010, following in the footstep of others.

It has four microinsurance policies: JBC monthly Savings Scheme, JBC Expected Monthly Savings Scheme, Social Security Insurance, and Promila DPS Scheme.

"We have branch offices at the upazila level where one can open a scheme," said Sheikh Khairuzzaman, assistant general manager of the state-run insurer.

Sazzad Hossain, a policyholder, says microinsurance offers an excellent opportunity for people, regardless of their income level, to protect themselves against risks.

He says it should be compulsory for the people, especially for the private-sector employees with no insurance coverage.