THE EFFECT OF DEMOGRAPHIC FACTORS ON DEMAND FOR LIFE INSURANCE IN ETHIOPIA

The study is intended to investigate the major demographic determinants of life insurance demand in Ethiopia, government employees in Wolaita Sodo town. The study focuses on the relation of life insurance with eight selected individual variables namely gender, age, marital status, religion, organisation, monthly income, educational level and family size. In order to meet the objectives, primary data were obtained by distributing self-administered questionnaires to a sample of 150 respondents. The data were distributed to the respondents using covenant sampling technique. Logistic regression model was used to analyze the effect of explanatory variables, like gender, age, marital status; religion, organisation, monthly income, educational level and family size on the dependent variable which is intend to purchase life insurance. A total of eight explanatory variables were included in the regression. The results obtained from the analyses conclude that only age variable of the government employees have a significant impact on demand for life insurance on government employees. Finally, it is recommended that the insurance companies to provide policies based on the age of the people in the study area and it should be considered by insurance companies as a strategic determinant in their business.