Factors Affecting Life Insurance Demand: A case study on (Ethiopian Insurance Corporation) EIC

Abstract

The fundamental purpose of insurance, whether of people or of property, is protection against possible economic loss, economic loss being simply defined as the unintentional and permanent loss of something which has monetary value. Moreover, insurance is significant part of modern economy and it is huge source of employment. The main objective of this study is to investigate factors affecting life insurance purchase, what factors significantly affect customers towards the purchase of life insurance policies and to assess the factors affecting the development of life insurance in Ethiopia. The study is made based on a primary data collected through self-administered questionnaire from buyers􀇯 who have purchased life insurance from EIC and aged 18 years or older. To analyze the data a combination of descriptive form of data analysis and multiple regression analysis was used. Multiple Regression analysis was performed to investigate the effect of each explanatory variable on life insurance demand. Accordingly except family size and gender factor, income level, age factor, education level and health status were found to be significant determinants of life insurance demand. Among the six determinant factors, income level takes the highest fraction in influencing the demand for life insurance policy followed by age factor, family size, gender, education level and health status in that order