Microinsurance (MI) is supposed to reduce not only the risk of poverty from negative consequences, but also to improve the overall quality of life. Seven types of Millennium Development Goals (MDG) have been extended to seventeen goals of SDGs rd by United Nations covering wellbeing of the people and prosperity. Sri Lanka has been ranked on 73 position in the progress of Human Development Index (HDI) in 2015 while 53% achievement according to the MDG tracks analysis. To come to these positions, Sri Lanka has been allocating a substantial amount of funds on free education, free health and social welfare, and subsidies to improve the wellbeing of the people and consequently, the budget deficit has increased to 7.4% while government debt ratio was 74% continuously. Sri Lankan government would have used a tool like MI with the private sector partnership to reduce the debt burden of the government. A mixed research method has been carried out in this study using exploratory sequential design, where qualitative results can help and inform the second quantitative method. Primary data was gathered conducting in-depth interviews with 20 market specialist from MI providers as well as finance. The results indicated that proper MI mechanism could contribute to the improvement of SDG towards prosperity of the country. Further, quantitative results supported mainly the direct relationship of MI with poverty reduction and life wellbeing while other indicators show an indirect relationship. If a public-private partnership focuses on long term sustainability with suitable policy amendments, the country would be able to achieve the SDG. Further, these results would immensely help to find out vital information for the development strategies of the MI as well as SDG.