Bridging the Protection Gap: Financial Inclusion and Insurance Accessibility during Crises A Theoretical and Conceptual Analysis

Affiliation

Abstract

Insurance is the part of financial inclusion that gets talked about least and needed most. When COVID-19 hit, when cyber-attacks became routine, and when geopolitical shocks began rippling through supply chains and currencies, households and small businesses found out how thin their protection really was. Financial inclusion is usually measured by bank accounts and credit access, but that misses something important: a family that can save and borrow but cannot insure is still one bad year away from poverty. This paper asks why insurance accessibility in India has lagged behind other forms of financial inclusion, particularly during crises, using a qualitative approach grounded in four theories, the access-usage-quality framework, prospect theory, diffusion of innovation theory, and the sustainable livelihoods framework. It traces India's financial inclusion policy, evaluates schemes like PMJJBY, PMSBY, PMFBY and Ayushman Bharat, and looks at what InsurTech and IRDAI's reforms have actually achieved. The barriers that emerge, affordability, literacy, distribution gaps and a persistent trust deficit around claims, resurface with particular force whenever a crisis hits. The paper closes with five practical steps and argues that insurance accessibility deserves to be central to financial inclusion policy, not an afterthought.

Keywords

Financial Inclusion, Insurance Accessibility, Micro-insurance, Protection Gap, Crisis Management, InsurTech