Types

• Some policies cover family assets.donkey image by Lovrencg from Fotolia.com
  
  Although there are many variations, typical policy types include life, health, disability and property risk. These policies are offered in benefit amounts much smaller than traditional insurance policies.
  
  

Technique

• Microinsurance companies pool risk by selling many policies.jar banking image by Yury Shirokov from Fotolia.com
  
  Providers are able to enter this market by pooling many micro policies together to create a sizeable actuarial sample, allowing companies to better predict the level of risk and price policies accordingly.
  
  

Usage

• Microinsurance could become a key market for insurance companies.digital key image by patrimonio designs from Fotolia.com
  
  According to Lloyd's of London, microinsurance covered over 135 million people in 2009. This represents 5 percent of the eligible market, creating a large potential opportunity for insurers.
  
  

Cost

• Microinsurance policies are priced to be affordable to poor families.Euro cents image by Star from Fotolia.com
  
  The average monthly premium for the average microinsurance policy in Africa is 33 cents per month, according to the International Labour Organization. These rates have fluctuated wildly as insurance companies strive to find a reasonable level of profitability while still addressing the needs of the world's poor.
  
  

Significance

• Aid organizations are pushing the profit opportunities for companies to enter the market.business people image by Jelica Grkic from Fotolia.com
  
  Many world aid organizations are pushing for insurance companies to offer microinsurance, and are proselytizing policies when working in poor areas to help stabilize the region. If companies can find a way to profit from microinsurance, this may help alleviate poverty in some of the world's lowest-income and most unstable areas.