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Participation in Micro Life Insurance and the Use of Other Financial Services in Ghana
Author(s) -
Giesbert Lena,
Steiner Susan,
Bendig Mirko
Publication year - 2011
Publication title -
journal of risk and insurance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.055
H-Index - 63
eISSN - 1539-6975
pISSN - 0022-4367
DOI - 10.1111/j.1539-6975.2010.01405.x
Subject(s) - life insurance , multivariate probit model , financial services , actuarial science , business , adverse selection , probit model , casualty insurance , insurance policy , economics , finance , econometrics
This article investigates households’ decisions to take up micro life insurance and to use other financial services. It estimates a multivariate probit model based on Ghanaian household survey data. The results suggest a mutually reinforcing relationship between the use of insurance and the use of other formal financial services. Risk‐averse households and households who consider themselves more exposed to risk than others are found to be less likely to participate in insurance. This suggests that insurance is considered to be risky. There is indicative evidence for adverse selection and a life‐cycle effect in the uptake of insurance.