The awareness of having life insurance policy: an exploratory study among lagos state university students in ojo, lagos, Nigeria
| Author | Mustapha Abiodun Okunnu/Oludare Tolulope Adeyemi |
| Position | Lagos State Polythenic, Ikorodu, Lagos, Nigeria/Dimension Consult Limited, Lagos, Nigeria |
| Pages | 265-272 |
Page 265
Life insurance has grown to encompass a wide variety of products. Most obviously and primarily, in its fundamental form, it is "death insurance". It aims to compensate these policyholder's dependents from financial losses following the demise of the policy hold. It compensates them for the loss of income; helps pay off the policy holder debts. Effectively, life insurance policies build up an off - balance sheet fund which the policy holder's heirs tap into on policy holder demise. (Narasimham, 2000). Life insurance in the present age performs an important function for risk planning and channels a large flow of savings into investments through financial and capital markets. Life insurance is an important vehicle for encouraging and mobilizing individual savings calculate on an actuarial basis, to provide for a certain sum of money in an uncertain future. It is an instrument for contractual savings, based on an anticipated future value (i.e policy claim) from a sum of discounted present values (i.e the premiums). ( Omar 2007)
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The research samples for this are students from Lagos State University, Ojo, there are about 6,000 students registered with this institution. The 500 questionnaires using random sampling technique were distributed in a period of 27 days in June - July 2007. A total of 458 results were received and compiled. This questionnaire is divided into two (2) sections, first was designed to gather the students' bio data and the second part was designed to gather the respondents' awareness on the importance of having life insurance policy.
Life insurance has become the most widely used means of family financial security planning. Apart from that, it can help ensures the financial security of family, pay the support of dependents and meet outstanding financial obligations when the policyholder dies. Furthermore individuals and families need to become aware of the benefits, issues and differences in various life insurance plans, (BCG, 2003).
Life insurance programs are an important part of an individual's financial plan. The traditional view of life insurance as a commodity - simply underwriting coverage, differentiated by price and little else evolving as communication, education, and benefit enhancements are added. Research and trends support the evolution of employer - based life insurance programmes from merely providing a benefit to beneficiaries at the point of claim to a programme that is an important, vent critical components to an individual's overall financial plan (metlife, 2001).
There are three main types of life insurance polices in actuarial literature (Back, 2000) including (a) whole life insurance - which provides a death benefit for lifetime (b) term life insurance - that provide a death benefit for a limited number of years and, (c) environment life insurance - which is a term...
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