Purchase Preference of Micro Insurance among Rural BPL Households A Study in Balasore District of Odisha

Abstract

Insurance is recognized worldwide as an important financial tool for risk mitigation. With newlineglobalization and the opening of the insurance sector in mid 1990s to private players in India, newlinethere is a radical change in business environment. The change in the industry has induced all newlineinsurance companies to be more competitive, customer oriented and market driven. This has newlinemoderated insurance products to be more innovative and reoriented them to penetrate to the newlineuntouched segments. In a country like India both insurance and micro insurance have newlinetremendous potential for ensuring social security. Micro insurance is a special insurance plan newlinedesigned for the low income people to meet the unforeseen eventualities. This product requires a newlineunique approach in sales, service and post selling situations. Like normal insurance product, it is newlinea contract between insurer and insured. The difference lies with the premium that is charged to newlinethe policy holder and the sum assured or the coverage. Here the distribution channels and target newlinecustomers are different. This postulates a balance between demand and supply of the product. newlineThe purchase intention and preference for this may vary from location to location and depends newlineupon many socio-economical parameters. The low income people (below the poverty line) also newlineaccess to various financial products in rural market. Under such circumstances, their interest and newlineawareness to purchase micro insurance to be understood and studied. Thus, the present research newlinegives an insight about the purchase preference of micro insurance among BPL families in rural newlineareas. The study includes databetween2000 to 2013 and focuses on the preference towards newlinemicro insurance purchase of the low income BPL families in rural area. The broad objective of newlinethis research is to investigate the purchase preference of people in rural area. The study also newlineexplores the risks faced by the target group at the household levels, their risk mitigating strategy newlineand important factors those influence the micro insurance purchase among