| dc.description.abstract | This exploratory research's main objective was to investigate
into the extent to which the life policies which Kenyans have purchased
are adequate to meet the needs for which they are intended.
The primary information for the research was collected by use
of questionnaires and a number of personal interviews. This information
was sought from a sample of 200 life policyholders, of whom only 75
responded and from executives of 10 insurance companies, of whom
only 8 responded. These 10 companies included those currently
underwriting individual life business in Kenya.
The findings show that all policyholders have their basic needs
as food, shelter, clothing, house operations and personal and miscellaneous
expenses. Other expenses include school fees, repayment of loans, caring
for relatives, contributions to 'harambee' and charity and various
sorts of entertainment.
The findings also show that most policyholders have assured
for the figure of Kshs 100,000 and Kshs 20,000. and this is just
because the figures look convenient and attractive. Considering
the extent to which they are covered, findings show that there is
underinsurance in the area of life. On the average, people have
assured for only about half of their needs.
The factors which influence the amount of life cover that one
purchases were found to be income and age. A person's income will
determine the extent to which he/she can afford premiums hence the
size of the policy. Age influences sum assured in that it is related to
the marital status of a person and size of needs and obligations he/she
has to meet. Findings also show that people do not purchase life cover
based on an analysis of their needs and this is due to limited incomes as o
well as conservatism on their part. Marital status and sex of an individual
were found to be of no influence in determining the sum assured.
Finally, the findings suggest that the problem of under-insurance
could be due to the fact that insurers du not play their expected role
of assisting clients match their needs with the sum assured. Recommendation
to correct the problem (under-insurance) include a campaign by the
insurance industry, to encourage people to purchase life cover earlier
in life when they do not have many obligations and can afford premium
payment, an encouragement to purchase other types of policies and not
only endowment, as well as a more spirited effort on their part to
train and supervise their agents to do a more commendable job of assisting
clients do a simple needs-income analysis and hence match sums assured
to needs. | en |
