The importance of life insurance in Malta : analysing the current level of awareness among Maltese citizens

Abstract

Life insurance has grown in importance throughout the years because it is not only of benefit to individuals by protecting against risk of premature death and leaving dependents under financial distress, but it also contributes towards economic development. It is therefore vital for the life insurance industry to raise awareness on life insurance to reduce the number of people without any coverage, as this will increase the protection gaps. Therefore, this study investigates the current level of life insurance awareness among Maltese citizens and ways of how to increase it, as well as to point out important information on the main Maltese life insurers. This was achieved by distributing questionnaires to citizens around Malta via email and via post, who were randomly selected from address books and email contacts. Since there are few major life insurers in Malta, another questionnaire was sent to the main four life insurance companies. Results from this study show that there is lack of awareness on life insurance. Most of those participants who have a life insurance policy are not adequately covered as they did not make the proper buying considerations needed when they bought their life policy. Furthermore, those people who do not currently have a life policy do not seem to understand on the importance of having a life insurance as most of them do not have any intentions to buy coverage in the future. Therefore, the conclusion is that there is lack of awareness on life insurance among Maltese citizens, implying that the life insurance industry needs to address such a problem by strongly underlining its benefits and how crucial it is to have coverage.