Emergency Fund (Risk Coverage)
Immediately after launching credit program in 1993, IDF observed most of the members and their family members suffer from various common diseases and spend a lot of money for medical treatment. Most cases they use money from their business or borrow from money lenders which makes their economic situation worse. Group members requested IDF to find solutions/safety nets to this problem during the review meeting back in 1995.
IDF explored the possibility of getting micro-insurance services to cover these risks from the insurance companies and revealed that the insurance companies were very expensive and not affordable by the poor. Then series of meeting and workshops were made with group members and field staff for about a year and finally came up with the idea of forming on “Emergency Fund” to address this issue.
“EMBERGENCY FUND” was finally created with joint contribution of IDF and group members in 1997. The main purpose of this fund was to support group members and their families in case of sickness or death. This program was finally launched in October 1997. IDF later created “Risk Fund” for damages or losses of projects undertaken by the members with loans.
IDF uses its branch and the network of health program to implement its Emergency fund/micro-insurance program. IDF reaches its clients through its branches. One paramedic/ health worker provides services to 2 branches on an average. Paramedics also assess the application for insurance claims and supervise the disbursement of claims.
The members can pay the premium in one or more installments. The premium is collected by the loan officers along with loan installments during the centre meeting.
Diagram: Institutional Structure
In case of any claim for sickness, death or disaster of activity damage the client informs respective field organizer who along with branch manager investigate the case. The branch manager is authorized to pay upto Tk. 500 for immediate treatment in case of sickness and Tk. 5,000 in case of death. The remaining claims for medical treatment or death are settled after the approval of the case by the approving authority. In case of activity damage, the total claims are paid in one installment after the approval of the case by the case by the approving authority.
- Death (Life);
Risk Insurance (Damage/loss of activities)
Diagram: Components of Insurance Scheme
Health and Death Insurance
In 2014, IDF has brought some changes in line with PKSF insurance schemes. Accordingly, some revisions on premiums and coverage are made. These details are presented below:
Premium and Coverage:
1.1 Premium: Members receiving loans up to Tk. 25,000 per year, pay Tk. 152 per year. Members pay 0.6% of the loan amount as premium if the loan amount exceeds Tk.25,000.
1.2 Coverage: The spouse and children are insured under this scheme. A maximum amount of Tk.2,000 is paid for the treatment in each case. In case of hospitalization, the claim is estimated on the basis of expenses of public hospital. IDF medical officer examines each case before the approval.
2.1 Premium: Members pay Tk.40 for funeral support and 0.5% of the loan amount for the risk coverage of the death of the respective borrower.
2.2 Coverage: In case of the death of a member or spouse, the entire outstanding loan amount is paid and the deceased family immediately gets Tk.5,000 for funeral.
Premium: The member pays 0.4% of the loan money as premium to cover risks of projects under this scheme.
Coverage: If, the insured project suffers a damage or loss, the member gets a maximum 50% of the loan money depending on the extent of damage. The coverage will be increased gradually depending on the size of fund.
Live Stock Insurance
Table : Claims by member and payments up to December 2016.
|Component||No. of claims met||Amount paid in BDT (m)|
|Up to 2015||In 2016||Up to 2016||Up to 2015||In 2016||Up to 2016|
|Risk Insurance/ Cattle||271||29||300||2.56||0.56||3.12|