The study is intended to investigate the major determinants of life insurance buying behavior in Nigeria insurance corporation Lagos State University, Ojo district. The study focuses on the relationship of life insurance with six selected independent variables (income, attitude, perception, premium, culture, and buying intention). The approach for this study is quantitative research approach. To find the major determinant factors for life insurance buying behavior, the researcher adapted correlation and descriptive mode which indicates that about 96.56 percent of determinant of life insurance buying behavior is explained by the selected six factors. it show that explanatory variables such as perception, attitude, premium, and the intention of buying behavior are statistically significant at 10 percent significance level., attitude, premium, and intension of buying behavior are positively related with life insurance buying behavior. Dependence ratio does not have a statistically significant relationship with life insurance. Income is the most important determinant factor that influences buying behavior for life insurance followed by perception, premium and culture. It was recommended that, the National Bank of Nigeria and the managements of Nigerian insurance companies should further enhance public‘s awareness and financial literacy by using different approaches since the sector have a great importance for the customers and all privet insurance company’s.





Life insurance companies are financial intermediaries that bring together the surplus spending unit (insured) and the deficit spending unit (insurer) for the purpose of the insurer protecting the financial interest of the beneficiary in the event of the demise of the insured (Impavido and Musalem, 2000). In this process life insurance companies act as a vehicle for the mobilization of savings for long term investment purpose, leading to economic growth and development. Through financial intermediation, life insurance product has become a key source of long term finance, encouraging the development of the global capital markets (Catalan et al., 2000; Impavido and Musalem, 2000).

Insurance itself is a risk transfer mechanism whereby the individual or the business enterprise can shift some of the uncertainties of life on the shoulder of another (liquat, 2006).

Life insurance is a policy that replaces a lost stream of income that results from the death of an individual (Todd, 2004). Life insurance is undertaken to provide protection to the insured’s family, creditors, or others against the loss of earning capability of the insured in the event of his death or serious injury. According to Oke et al (2010) life insurance is a protection of an economic value of an asset.

Laying affirmation to the inevitability of the occurrence of death someday Liquat (2006) submits that, there is a general agreement as to the fact that risk is present in all human endeavours as there is uncertainty as to what will be the likely outcome about a person’s action, and there is no certainty however about the exact time, date, year or place when such event like death will occur to anyone.

Hence, for the human life, there is uncertainty about when death will occur, but there is the certainty that death must occur.  The need therefore to provide for the needs of one’s dependants after life necessitate the need for life assurance. In addition, life assurance the endowment type may be taken out to provide for specific expenditure in the future and the categories for which life assurance will provide for include the risks of premature death, death, longevity, disability and sickness (Oyetayo, 2006; Vaughan and Vaughan, 2002).

Understanding the consumer’s perception and attitude towards insurance and creating a demand for life insurance is essential in facilitating the success of insurance services. Perception is the method by which organism deduce and categorize sensation to fabricate a significant experience of the world (Razak and Kasim, 2014).

Baker (2003) assert that perception can also be described as one’s (consumer’s) ultimate experience of the world and typically involves further processing of sensory input. In practice, sensation and perception are virtually impossible to separate, because they are part of one (consumer) continuous process. Thus, perception in humans describes the process whereby sensory stimulation is translated into organized experience or percept. Other than that, the processes of perception routinely alter what humans see (Razak and Kasim, 2014).

When people view something with a preconceived concept about it, they tend to take those concepts and see them whether or not they are there. This problem stems from the fact that humans are unable to understand new information, without the inherent bias of their previous knowledge (Jessica, Devin and Brandy, 2009). A person’s knowledge creates his or her reality as much as the truth, because the human mind can only contemplate that to which it has been exposed. When objects are viewed without understanding, the mind will try to reach for something that it already recognizes, in order to process what it is viewing (Razak and Kasim, 2014).

In other word, perception on the workability and effectiveness of life insurance product may be an important factor that may affect how the policies will be demanded by prospective customers. Hence, this research study will examine the “effects of consumer perception on the demand for life insurance products with a special reference to staff of Lagos State University, Ojo.



Demand for any product may be affected by a number of factors depending on the nature of the product and the considered utility derivable from it. And for a product like life assurance, the demand for insurance arises from the satisfaction that a consumer gains from the increase in financial security achieved by transferring the risk of loss to an insurer such factors as the country’s level of development, in terms of standard of living and availability of medical infrastructures, life expectancy, level of dependency of the old on their children and government as well as the number of educated people in that country will be important influences on the demand for life insurance product.

Researches linking consumers’ perception with demand for life insurance products in developing countries with Nigeria inclusive have shown that insurance services seem not to have been so accepted enthusiastically in developing countries. The abysmal level of consumers’ perception and ultimate demand for life insurance products in developing economies has attracted relative interests among researchers and practitioners alike.

Risk has been identified as a central fact of life in most cities in Nigeria. For example, Omar (2005) assesses consumers’ perception towards life insurance patronage in Nigeria and found out that there is lack of trust and confidence in the insurance companies. Other major reason for this attitude is lack of knowledge about life insurance product, owing to lack of marketing communication strategy that is based on re-orientating and informing the consumers of the benefits inherent in life insurance so as to reinforce the purchasing decision. Some of the problems associated with this perceptual error have been one of improper marketing strategy.

The role of culture in Nigeria is all pervasive that demand for life insurance is grossly affected to the extent that it defines consumers risk aversion. Now, religion is another drawback since it provides an insight into the individual’s behaviour; and understanding religion is an important component of understanding a nation’s unique culture. Religion historically has provided a strong source of cultural opposition to life insurance as many religious people believe that a reliance on life insurance results from a distrust of God’s protecting care. Until the nineteenth century, European nations condemned and banned life insurance on religious grounds. Even until now religious antagonism to life insurance still remains in several Islamic countries.

According to Ifejionu and Emmanuel (2013) there are four main attitudes which religious opinion may adopt towards social institutions and economic relations and these are:

  • Standing on one side in ascetic aloofness
  • Taking for granted and ignoring them
  • Throwing itself into an agitation for some particular reform
  • Asking for amendment to what is on offer.

The Lagos State University is currently having a life insurance scheme that provides cover for its teaching and non teaching staff. But the effectiveness of this policy has often led to some serious debate among the different stakeholders calling for its improvement. Their bitterness is the fact that families and relatives of the deceased go through struggles and prolonged waiting before receiving the entitlement of those who had meritorious served the institution. For example, in the recent time of the twenty (20) staff members of the Lagos state university who died in the past five (5) years, families of two (2) staffs are yet to be paid.

It is against this backdrop that the researcher is inspired to assess the effect of consumer perception on the demand for life insurance products with a special reference to staff of Lagos State University, Ojo.



Based on the above general objective, the following are specific objectives of the study:

  1. To obtain how have customer’s perception to buying life insurance.
  2. To know the relationship between life insurance buying intention and other variables.
  3. To know the effect of customer’s perceptions on the demands of life insurance


  1. How have customer perceived to buying life insurance?
  2. What is the relationship between life insurance buying intention and other variables?
  3. What is the effect of customer’s perceptions on the demands of life insurance?



The main reason for this study is that the researchers have not paid enough attention to this subject in the insurance sector. Therefore, this study is expected to provide empirical evidence on the determinant of life insurance buying behavior. Thatmany parties like management, regulators, investors, customers and privet insurance companies will be benefited from the results.

Management: by identifying the determinants of life insurance buying behavior, the management of Nigerian Insurance Corporation will take the necessary actions to improve the performance of their company and choose the right decisions.

Regulators: National bank of Nigeria will be interested in knowing whether the life insurance market is grows or not to take the necessary measures to support for grousing.

Investors: Investors interested in such studies in order to protect their investment, and directing it to the best investment.

Customers: Customers interested in knowing the ability of Nigerian Insurance Corporation to pay their obligations based on the indicators of the life insurance benefit. Moreover, the researcher also contributes that this study can potentially serve as a stepping stone for further research in the area.



Attitude: is a lasting, general evaluation of people (including oneself), objects, advertisements, or issues. An attitude is a lasting because it intends to endure over time. It’s general because it applies to more than a momentary event, such as hearing a loud noise, though you might overtime, develop negative attitude towards all loud noises (Solomon 2009 p256).

Perception: is the process by which people select, organize and interpret these sensations as light, color, sound, odor and texture through the sensory organs. The study of perception then focuses on what we add to these raw sensations in order to give them meaning (Solomon 2009 p52).

Price: is the amount of money one must pay to obtain the right to use the product or service (Hawkins and David, 2010 p21).

Income: the amount of money received over a period of time either as payment for work, goods, or services, or as profit on capital (Microsoft Encarta, 2009).

Culture: Culture is a society’s personality. It includes both abstract ideas, such as values and ethics, and material objects and services, such as the automobiles, clothing, food, art and sports that a society produces and values. Put in another way, culture is the accumulation of shared meanings, rituals, norms, and traditions among the members of an organization or society (Solomon 2009 p578).



The study has not gone up to addressing all types of products and services of the Nigerian insurance corporation due to time and financial constraints rather the study is merely addressing the effect of customer’s perception on the demand of insurance, using Lagos state university Ojo as case study. It would have also been very useful, if it included of all types of business on insurance buying behavior. However, due to the constraints of cost, time and other resources, the researcher was forced to limit the study only on those selecting customers ‘of EIC determinants of life insurance buying behavior.


One of the limitations of this research is small number of insurance data set. The life insurance data prior to 1983 were not available; the question of whether the results suffer from small sample bias may arise. Another main problem in this study has been inconsistent of data from different institutions, Lack of previously conducted studies on similar topic and accessibility of sufficient current literature on the subject of life insurance in the Nigerian context makes this study difficult. Originally the researcher has planned to use multiple regression models to know the determinants of life insurance buying behavior of customers. However, the model is found to be unfit for the fact that the F test is insignificant.




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