Risks are a central part of life for households in low-income countries and health shocks in particular are associated with poverty. Formal mechanisms protecting households against the financial consequences of shocks are largely absent, especially among poor rural households.
Health shocks pose a significant risk to the welfare of agricultural households. Implementing pre-payment or saving mechanisms might help protect households against the financial consequences of ill health. Such mechanisms, however, should take into account the competing shocks that agricultural households face, making it almost impossible to reserve a share of their limited resources for the protection against health shocks only.
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