Over the past few decades, governments and donor bodies became more focused inrnalleviating poverty through major policy reforms such as the structural adjustmentrnprogrammeas well as the economic recovery programe. The world bank and therninternational monetary fund therefore initiated numerous poverty reduction strategyrn(PRS) programmes through many governments in developing countries. In recent times,rnthe government of ghana has intensified its crusade on poverty alleviation by grantingrnmicrocredits through various microfinance institutions in the country to many micrornentrepreneurs operating in the informal economy.rnthe main objectives of this study was therefore to investigate the main types of risksrnfacing sampled households operating in the informal economy of ghana and identifyrnvarious coping strategies used in managing their vulnerability to risk and an appraisal ofrnthe preference for micro insurance as the best alternative coping candidate. The studyrnused data from the data base of enterprise life assurance company in Accra for itsrnanalysis. Descriptive statistics and probit regression procedures were used in this study.rnthe study reveals that households faced a lot of risks among which the major ones arernhealth, death and business risks. It was observed that vast majority of householdsrnessentially used informal insurance as risk management options.rnthe regression results showed an inverse relationship between informal insurance andrnsampled households preference for microinsurance. This means that the more householdsrnare keen on using informal insurance the less their preference for micro insurancernservices. Additionally, the coefficients of health and property risks were positivelyrnrelated to sampled households preference for microinsurance, meaning that, givenrnhouseholds frequent exposure to these risks, the need for microinsurance must increase.rnthis study invokes a major challenge on the government of ghana to ensure a smoothrndelivery of the national health insurance scheme to households and advises the nationalrninsurance commission to encourage insurance companies to intensify their awarenessrnprogrammes on the benefits of their various micro insurance products as the major wayrnforward in risk management.