Life insurance with insurance capital funds as a form retirement savings: Determinants for the self-employed

Abstract

Reduction of the public pension system generosity should encourage all future retirees to accumulate private retirement savings. They have many options in this area, both dedicated pension programs (pension pillars), and a whole range of financial market investment instruments (non-pillar solutions). The main objective of the paper was the empirical identification of factors that determine the level and propensity to save in the form of life insurance with insurance capital funds for retirement purposes by self-employed persons in Poland. The microeconomic perspective of considerations was adopted in the research process. On the basis of a review of economic literature, a set of individual characteristics that affect savings decisions of natural persons was distinguished, then an attempt was made to find out whether the same groups of factors also determined the individual decisions of self-employed persons regarding saving for retirement in the form of insurance capital funds. The following research hypothesis was verified: Ownership of retirement savings in the form of life insurance with insurance capital funds by self-employed natural persons in Poland is determined both by social and economic factors, and the impact of these factors varies. The empirical study showed that the accumulation of retirement savings by self-employed persons in the form of life insurance with insurance capital funds was the least important way to supplement the future pension from the public pillar. Self-employed persons are characterized by a relatively high propensity to save for retirement (higher than the average propensity to save in Poland), prefer non-pillar forms of collecting voluntary savings for retirement, primarily in the form of real estate. The strength of the social and economic factors varies.