Determinants of individual life-related insurance consumption: The case of the Slovak Republic

Abstract

The premature death of a breadwinner, serious injuries or an insufficient level of income during retirement can decrease the living standard of households substantially. Life insurance represents a tool for managing such kinds of uncer-tainties, however, individuals do not adequately consider this need for security. Papers focusing on factors determining life-related insurance consumption identified many variations in the effect of these factors. The reasons are not clear, but one of the explanations is the aggregated nature of life insurance without focus on the type of covered risks. Based on survey data, we confirm the differences in the determinants of various risks covered by life insurance. In the general life insurance model, we confirmed the following as significant deter-minants: gender, head of household status, combination of marital status and dependent children, saving behaviour and employment status. In the private pension insurance coverage, significant determinants are age, education, saving behaviour and employment status. The willingness to buy accident cover with life insurance is determined by the saving behaviour and employment status. Marginal effect has the status of head of household.