First Sehat Tahafuz Plan under microinsurance project launched

First Sehat Tahafuz Plan under microinsurance project launched

ISLAMABAD: (APP) The Securities and Exchange Commission of Pakistan (SECP) has approved a new micro-insurance product under the SECP (Micro insurance) Rules, 2014 with the name "First Sehat Tahafuz Plan".

SECP said in a statement here that under this micro health (hospitalization) coverage can be provided to low-income clients of a microfinance institution.

The initiative is in line with the objectives of National Financial Inclusion Strategy (NFIS) recently adopted by the federal government, and aimed at promoting and developing the micro insurance market in Pakistan.

Under the NFIS, the government has committed to providing access to broad-based financial services, including insurance to those consumers who are currently excluded from the financial sector.

For the purposes of bringing financial inclusion through the insurance sector, micro-insurance is considered to be of significant importance.

Most low-income people face a number of risks events like illnesses, accidents, disability, deaths, natural disasters - all events with negative effects leading to a decline in income or a rise in expenditure or both.

Low-income people are more vulnerable to these risks: they are exposed to a higher number of risks, to more severe risks, and to a higher probability of a risk occurring because of their more hazardous living and working conditions.

Micro -insurance can play a vital role in providing social and financial protection against losses by ensuring financial shock absorbency of low-income households to both predictable and unpredictable risk events and to maintain wellbeing.

With the introduction of new micro-insurance products in the market, it is envisaged that the uptake of insurance in the masses would increase manifold, thereby, having a positive impact on the insurance penetration and insurance density levels in Pakistan.