Perception and Awareness of Microinsurance among Low-Income Earners in Nigeria

Abstract

Microinsurance was introduced in Nigeria mainly to help people who do not earn much and cannot handle large financial shocks on their own, yet the idea has not really taken off as expected. From my observations during this study, many low-income earners still do not have a clear understanding of what microinsurance is meant to do for them. Some have simply never heard of it, while others only have a vague idea that it is “some type of insurance.” Because of this, I decided to look more closely at how low-income earners actually perceive microinsurance and whether they consider it useful. The study used a questionnaire, and 150 people responded: 120 low-income earners and 30 insurance workers with direct experience offering these products. The findings paint a mixed picture. More than half of low-income earners were unaware of microinsurance before the survey, but many showed interest after a basic explanation. Many respondents mentioned protection against unexpected expenses, some level of financial stability, and peace of mind as reasons they would consider microinsurance. But the other side of the story is that many people do not trust insurance companies, and this came up repeatedly. Some said their hesitation comes from hearing about unpaid claims or complicated processes. So even when people like the concept, they are not always confident enough to commit to it. The statistical analysis also showed that income level influences how people assess insurance affordability. Those with very low or unstable incomes do not see insurance as something they can regularly afford. Overall, the study suggests that microinsurance can be valuable, but awareness, trust, and communication gaps need to be addressed before low-income earners fully embrace it.