Determinants of Life Insurance Policy Purchase in Ethiopian Insurance Corporation Jimma Branch

Abstract

The main purpose of this study was to investigate the determinants of life insurance policy purchase in Ethiopian Insurance Corporation. Descriptive study deigns and mixed research approach was adopted to answer the research questions. Primary data have been collected through questionnaire and interview. To achieve the objective of the study 207 questionnaires were distributed and 198 of them were successfully completed and used for analysis. To analyze the data a combination of descriptive (table, percentage, mean and standard deviation) and Inferential data analysis such as multiple linear regression and correlation were used. Multiple Regression analysis was performed to investigate the effect of each explanatory variable on life insurance purchase. Accordingly the result showed that among the demographic factors gender and educational status were significantly determine life insurance policy purchase, but age and religion did not. Monthly income level, awareness, attitude, and premium were found to be significant determinants of life insurance purchase. Among the eight determinant factors, income level takes the highest fraction in influencing the purchasing for life insurance policy followed by educational status, awareness, attitude, gender and premium in that order. It is recommend that the Ethiopian insurance corporation should further enhance public‘s awareness and financial literacy by using different approaches since the sector have a great importance for the purchasers.