Life insurance awareness in Malta

Abstract

Life insurance is a type of insurance policy that pays dependents upon the death of the policyholder. It does not only come in policies that pay only on death, however, but it can also be a form of savings plan which gives the policyholder a lump sum of money upon maturity. This money would be made up of the premiums paid by the policyholder throughout the years and the interest that that money had accumulated. This research was conducted in an attempt to find out the level of awareness of life insurance in Malta, particularly when it comes to the investment factor of certain policies, as well as the reasons behind the low insurance penetration rate of Malta relative to other countries in the European Union (CEA Statistics No 44). The factors that might affect these statistics were analysed in order to find the most prominent one and, furthermore, solutions to overcome this low rate were established. Results of the study show that the Maltese population is indeed lacking in knowledge of life insurance. The level of apathy people show toward the subject matter adds to the concern. It was established that, not only are people not aware of the fact that life insurance can be a savings plan, but they are also rather indifferent to the issue. The lack of trust that the Maltese people have towards the insurance industry does not help. Results also suggest that sellers of insurance do not advertise their products as efficiently as possible, as most receivers have trouble understanding such adverts.