Public Perception and Patronage of Life Insurance in Ghana: Evidence from Volta Region.

Abstract

This study examines perception that the public have about life insurance companies and their services in Ghana. The objectives of the study were to examine public awareness and perception of life insurance services in the Volta Region, identify factors that influence patronage of life insurance in the Volta Region and evaluate the barriers/constraints that affect patronage of life insurance services in Volta. The study was a cross-sectional conducted on 150 simple randomly selected respondents in the Volta Region of Ghana. The study employed a five point Likert scale, frequency analysis, percentages, mean, standard deviation, Probit regression model and the Kendall’s Coefficient of Concordance (W) were employed to analyze the objectives. Descriptive analysis showed that majority (57%) of the respondents were males whereas 43% of the respondents were females. Analysis of data showed that quite significant number of the respondents of about 78.67% were aware and have heard about life insurance packages whiles a few of about 21.33% expressed unawareness of life insurance policies in the system. Also, about 35% of the respondents adopt or subscribed to life insurance package whiles majority of the respondents of about 65% indicated that they have never subscribed for life insurance nor any other type of insurance package in the Volta Region of Ghana. 81.33%of respondence have expressed negative perception towards life insurance services. The factors that were significant to influence patronage of life insurance scheme were gender, age, level of education, access to life insurance Company, perceived health status, monthly expenditure of respondent, and cost of life insurance premium. Kendall’s Coefficient of Concordance (W) statistic was significant at 5% indicating that there was 74% level of agreement among the respondents’ in rankings of the constraints faced in patronising life insurance policy. It was revealed that major constraints or challenge faced by respondents in patronising life insurance policy were; high cost of premium on insurance products, low reward/compensation rate, unreliable insurance services, lack of education on the benefits of life insurance, limited disposable income, mistrust and negative perception and delayed claims payments. The study concluded that majority of the respondents were aware of life insurance packages but proportionally few of the sampled respondents subscribe for life insurance packages. The reason was specified through interviews that cost of insurance premium, the bureaucracy and delay in payment of claims to beneficiaries, poor education of insurance packages. However, factors that influence patronage of life insurance were identified as; gender status of a respondent age, years of schooling, access to life insurance Company, perceived health status, monthly expenditure of respondent, and cost of life insurance premium. The study recommends that education on insurance organisations and life policy should be intensified by the Insurance Companies, NGO’s and other financial agents in order to minimise or alleviate the negative perception the public hold about insurance policies. This would eventually increase the level of awareness and subscription of the policy. Also, management of the insurance companies should consider the significant of socio-economic variables in their decision making whiles strengthening laid procedures for insuring new clients in order to make the policy more attractive to the general public. It is suggested that the management of insurance companies pay more attention to the identified constraints faced by respondents in their intention to subscribe for insurance policies in order to attract more individuals to subscribe to insurance policies.