Socio-Economic Factors Affecting the Demand for Life Insurance Policy in Nigeria

Abstract

Several studies have found evidence that the development of the insurance industry is tantamount to economic growth. Insurance and actuarial science researchers believe that the premium fixed for life insurance products depends on some factors. Research showed that the methods used to set insurance premiums for life insurance policies do not account for socio-demographic factors as the models used are not optimal. As much as life insurance policy is fundamental for persons in Nigeria, the exclusion of socio-demographic factors in evaluating life insurance policies undermines the efficacy of the demand for life insurance policies. The study examines the effect of socio-demographic factors on the demand for life insurance products using the quantitative research design and a sample of 92 policyholders across four insurance companies in Lagos. This sample was selected using convenience sampling, and a structured questionnaire for data collection. The data analysis technique was the multivariate regression model using IBM SPSS software. The results revealed that socio-demographic factors showed a statistically significant influence on term assurance and endowment life insurance but showed no statistically significant effect on whole life insurance which implies that policymakers should ensure policies that provide gainful employment are in place since income is an influential determinant of the demand for insurance products.