Gender perspective on life insurance demand in Ghana

Abstract

Purpose Against the background that Ghanaians seldom purchase insurance policies, the purpose of this paper is to investigate the determinants of life insurance uptake among male and female household heads in Ghana. Design/methodology/approach The study employs data on 775 male and 233 female household heads from the sixth round of the Ghana Living Standards Survey. Adjusted Wald test statistics and logistic regressions are employed for the empirical estimations. Findings Results from the adjusted Wald test show that the sampled male household heads significantly differ from their female counterparts in terms of the selected socioeconomic and demographic characteristics. Though ill health status, higher wealth, being self-employed or in wage or salaried employment and residing in either of the three northern regions (upper east, upper west and northern regions) in Ghana broadly affect the demand for life insurance among both male and female heads, other factors are peculiar to either parties. Particularly, whereas female heads who are married and those with more dependants have a higher propensity of purchasing life insurance policies, their male counterparts with higher education are more likely to buy life insurance policies. Research limitations/implications The paper adds to the paucity of cross-sectional studies on life insurance demand in Africa. Practical implications Based on the explored determinants, insurers could better regulate the purchase of their products by taking into consideration the gender differences to maximize their sales and enhance economic growth and development. Originality/value This paper explores the gender dynamics in the determinants of life insurance demand in a developing country, Ghana. Besides, findings from related literature are reported to be mixed. Though the current paper is not wholly nationally representative, it utilizes data from across all the ten administrative regions of Ghana. To the best of the authors’ knowledge, no prior study has been conducted in this manner.

Life insurance purchase behaviour: A systematic review and directions for future research

“…Wealth held by the consumer is determined to have a positive influence on LIPD, since wealthier consumers are more risk-averse and inclined to cover the mortality risk by purchasing a LIP (Ampaw et al, 2018;Eisenhauer, 1997;Shi et al, 2015). Eisenhauer (1997) also obtained similar findings by controlling loss probabilities, household size, income, age, inflation and premium expenses.…”

“…used four categories, very bad, bad, so-so and good, or very good, to denote the health status of the respondents. Both identified a negative correlation between health status and life insurance purchases (Ampaw et al, 2018;Shi et al, 2015).…”

“…They found a positive effect of the number of dependents on premiums sold by life insurance companies per capita. Ampaw et al (2018) identified the effect of the number of dependents as significantly positive for female heads and insignificant for male heads. The study was conducted in Ghana, where it is believed that female heads of the family in the absence of male heads are more likely to emerge and efficiently manage the family's financial burden.…”

“…This review reflects that the existing research in life insurance purchase behaviour is mostly based on the Expected Utility Theory. The theory assumes that consumers purchase LIPs to maximize the beneficiary's utility (e.g., Alhassan & Biekpe, 2016;Ampaw et al, 2018); Andersson & Eriksson, 2015;Arun et al, 2012;Beck & Webb, 2003;Celik & Kayali, 2009;Chen et al, 2001). However, an inadequate amount of research is present in the literature on investigating consumers' bounded rational behaviour in a life insurance context based on the behavioural economics theory (Bauchet & Morduch, 2019;Coe et al, 2016).…”

“…In terms of the context of studies (Table 3), this review indicates that most of the articles (77%) gathered data from a single country (e.g., Ampaw et al, 2018). In contrast, relatively fewer articles (23%) performed a study on the data from multiple countries (e.g., Alhassan & Biekpe, 2016).…”