Microinsurance is the protection of low-income people (defined as those living on more than approximately $1 but less than $4 per day[1]) against specific perils in exchange for regular premium payment proportionate to the likelihood and cost of the risks involved.
Insurance functions on the concept of risk pooling, and likewise, regardless of its small unit size and its activities at the level of single communities, so does microinsurance.
The last definition therefore, includes the critical features of the previous three: Microinsurance, like regular insurance, may be offered for a wide variety of risks.
Microinsurance has made a significant difference in countries like Mali, as Maxime Prud'Homme and Bakary Traoré describe in Innovations in Sikasso.
Specifically in Bangladesh, micro health insurance schemes are having trouble with financial and institutional sustainability, Syed Abdul Hamid and Jinnat Ara describe, but things are improving.
Without the insurance, however, they will be inclined to do the opposite; since they have to safeguard a minimal level of income for themselves and their families, crops will be grown which are more drought resistant, but which have a much lower yield in good weather conditions.