Limitations

• First of all the poor have lot of limitations both psychological and financial to have an access to insurance may be due superstitious beliefs or financial hardships – they are able to afford to pay the premium set by the insurance companies.
• Secondly, though the Insurance companies have a mandate, laid down by IRDA to provide/ cover micro insurance in the rural areas, it is not mandated specifically for the poor and venerable.
• Thirdly, Service delivery mechanism is big set back. Reaching the poor for insurance coverage, opportunity cost, cumbersome documentation, delay in claim settlement for days, months and years together are the limitations

Issues in Traditional Model

• People are not even aware that they are insured in most of the cases. As they or their family member do not even the insured die, the claim amount is not claimed and they are deprived of the real benefits quite often.
• More over, the relationship between the insured members and the insurance company is not properly established. As a result, people have no trust.
• As I have told you above, cumbersome documentation and claim settlement process, distant offices of the insurance companies made people to have dislike for the insurance.