Does the Price of Life Insurance Influence the Uptake of Life Insurance in Kenya?
Journal Title: IOSR Journal of Economics and Finance (IOSR-JEF) - Year 2018, Vol 9, Issue 5
Abstract
Life insurance plays an important role in individuals and families financing by providing a hedge against loss of income following the loss of the wage earner. However, data from Association of Kenya Insurers (AKI), reports that in life insurance in Kenya uptake is at 6% leaving a majority of Kenyans uninsured and vulnerable to financial risk and loss, further life insurance penetration in 2014 had dropped to 1.87% from 2.28% in 2013. The purpose of this study was to determinewhether price of life insurance influences the uptake of life insurance in Kenya. This study was based on adaptation level theory.Stratified random sampling technique was used to determine the respondents from a sample of 100. A close ended questionnaire was used to collect data from the respondents. The data was analyzed in two levels; descriptive and inferential data analysis. In descriptive data analysis mean scores were calculated.The overall mean of the objective was 3.56 which indicates that most responses were 4. This showed that most respondents agreed that the price of life insurance influences uptake of life insurance in Kenya. Inferential data analysis involved correlation, regression and Analysis of Variance (ANOVA). The study indicated a very strong negative correlation (0.798) between the price and uptake of insurance products in Kenya. The R square was 0.637 which indicated that the price explain 63.7% of the variation in the uptake of insurance products in Kenya. The rest 46.3% can only be explained by other factors other than the price. The null hypothesis that the price of life insurance does not statistically significantly influence the uptake of life insurance products in Kenya was rejected. The study revealed that price of life insurance in Kenya. It recommends that insurance companies should consider lowering the cost of premiums, be creativeand be intensive in awareness of life insurance, access the needs of life insurance consumers before they set the price of the premiums, should develop a packaged life insurance product that has flexible payment schedule.Life Insurance companies should embrace online insurance and convince their customers to use online insurance and the government should have more tax incentives to life insurance companies.
Authors and Affiliations
Fredwilly Nderitu, James N. Kung’u, David M. Gichuhi
Keywords
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- EP ID EP414933
- DOI 10.9790/5933-0905026471.
- Views 194
- Downloads 0
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