Improving Credit Life Microinsurance

This paper examines the status of credit life microinsurance, and formulates ways to improve the overall quality of credit life products. It discusses what credit life insurance is and how it is structured, who benefits from this coverage, how good value for clients is measured and achieved, and how credit life products could be expanded to offer greater value to clients.

The paper examines operational considerations necessary to improve credit life products and builds a data pool through a survey conducted with thirty organizations. It concludes with recommendations for the development and implementation of credit life products. They include:

• Insurers and lenders should learn from basic credit life products and used that learning to expand options available to clients;
• Basic credit life and enhanced family cover should be treated as stand-alone products and priced relative to loan amounts;
• There should be no legal issues barring lenders from providing basic credit life;
• Administration of credit life products should be simple with active efforts to contain costs;
• Credit life products can be flexible and responsive to the needs of insurers, lenders and clients.