Abstract
The purpose of this study is to estimate the influence of microeconomic determinants for men and women on life insurance purchase decisions. Indeed, only a few papers have tried to justify rigorously the gender-based differences in life insurance ownership. Based on survey data collected by the Bank of Italy in 2012 (the Survey on Income and Households) we estimate the propensity to buy and the willingness to pay for a life insurance contract. We examine the differences between two types of contracts, i.e. traditional life and term life insurance and show that, in all cases, women are less likely to be insured than men. The demand for insurance is highly correlated with income, family structure and employment status. Geographical variables within Italy are significantly affecting the demand too. More importantly, we introduce novel variables related to the financial status of households and their proximity to the financial market, by considering home and stock portfolio ownership. These determinants turn out to be significant and to affect demand almost as much as traditional variables. To study policy implications, we calculate the probabilities of having either life or term insurance, under several scenarios for the determinants of demand. Again, financial market proximity plays a key role.
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