Briefing Note #8: Improving credit life microinsurance

Briefing Note #8 explains how credit life cover - insurance that covers the outstanding principal and interest of a loan upon the death of a borrower - is the logical starting point for organizations new to microinsurance, because it is generally easy to introduce, simple for borrowers to understand, and seen by financial intermediaries as a support to their core business. Unfortunately, credit life insurance is often designed poorly, providing little value to clients and their beneficiaries. When products provide little value, they reinforce a common negative attitude toward insurance. Thus, improving the value of credit life products may improve clients' attitudes towards insurance, and in turn improve overall demand for microinsurance.