Examining the New Purchase of Whole Life, Endowment and Temporary Insurance through Macro-level Demographic Factors: The Case of Malaysia

AbstractThis is a preliminary investigation into the role of macro-level demographic factors, namely crude birth rate, crude death rate, total fertility rate and life expectancy at birth, in the new purchase of three different types of life insurance, i.e. whole life, endowment and temporary insurance, using correlational and linear regression analysis. From correlational analysis, both the current and lagged crude birth rates, crude death rates and total fertility rates are found to have significant weak to moderately strong positive relationship, while both the current and lagged variables of life expectancy at birth have significant moderately strong negative relationship with the growth of the new purchase of both whole life and temporary insurance. On the other hand, while none of the current-period demographic factors are found to have any significant relationship but the lags of crude birth rate and crude death rate are found to have significant weak positive relationship with the growth of the new purchase of endowment insurance. From linear regression analysis, only crude birth rate is found to have a significant positive relationship with the growth of the new purchase of whole life insurance. The findings show that demographic factors seem to play a minor role in the purchasing of new life insurance, and crude birth rate appears to be the demographic factor that is important in explaining the new purchase of whole life insurance. As this is a preliminary investigation, further research in this respect is warranted