The focus point of this very study is to identify the socio-demographic and economic factors affecting insurance coverage amongst the lowest income households (B40) in Perak. The Logit Model and Ordinary Least Square Model were applied in achieving the objectives of the study. As such, based on the results of Model 1, the findings show that gender, marital status, residential location, type of employment, savings and loans are significant features which give effect to the probability of insurance coverage ownership (Logit Model). Meanwhile, Model 2 shows that the level of education solely is crucial in affecting the total insurance expenditure (OLS Model). Furthermore, Model 3 suggests that only age and loans are the important influence to the probability of having an insurance (Logit Model). Finally, Model 4 exhibits that the factors of race, residential location, education level, type of employment sector, number of dependents, income, savings and loans are the essential influence to estimate the affordable amount of insurance expenditure (Model OLS). On average, the lowest-income households (B40) in Perak who have the most insurance procure monthly insurance expenses ranging from RM101 to RM200, while the lowest-income households (B40) who do not have insurance but hold the want to have one are most willing to obtain insurance expenses between RM51 to RM100. Hence, this indicates that the lowest income households (B40) in Perak are in fact interested in owning insurance but due to several factors or constraints; these have become the impinging reasons for their inability to pay the insurance premium monthly. To treat this, BNM should increase the participation in the ownership amongst Low Income Households (B40) by a reduction in distribution costs, simplification of the design and delivery of products as well as assurance of meaningful protection to policy holders.
Ahmed, S., Hoque, M. E., Sarker, A. R., Sultana, M., Islam, Z., Gazi, R., & Khan, J. A. (2016).Willingness-to-pay for community-based health insurance among informal Workers in Urban Bangladesh. PloS one, 11(2), e0148211.
Anderson, D. R., & Nevin, J. R. (1975). Determinants of young marrieds' life insurance purchasing behavior: An empirical investigation. Journal of Risk and Insurance, 375-387.
Arpah, A. B. (2012). The Individual Demand for Private Health Insurance in Malaysia (Doctoraldissertation, Universiti Utara Malaysia).
Arun, T., Bendig, M., & Arun, S. (2012). Bequest motives and determinants of micro life insurance in Sri Lanka. World Development, 40(8), 1700-1711.
Babbel, D. F. (1985). The price elasticity of demand for whole life insurance. The Journal of Finance, 40(1), 225-239.
Baek, E., & DeVaney, S. A. (2005). Human capital, bequest motives, risk, and the purchase of life insurance. Journal of Personal Finance, 4(2), 62.
Beenstock, M., Dickinson, G., & Khajuria, S. (1986). The determination of life premiums: An international cross-section analysis 1970–1981. Insurance: Mathematics and Economics, 5(4), 261-270.
Brighetti, G., Lucarelli, C., & Marinelli, N. (2014). Do emotions affect insurance demand?. Review of Behavioral Finance, 6(2), 136-154.
Browne, M. J., & Kim, K. (1993). An international analysis of life insurance demand. Journal of Risk and Insurance, 616-634.
Browne, M. J., Chung, J., & Frees, E. W. (2000). International property-liability insurance consumption. Journal of Risk and Insurance, 73-90.
Burnett, J. J., & Palmer, B. A. (1984). Examining life insurance ownership through demographic and psychographic characteristics. Journal of risk and insurance, 453-467.
Campbell, R. A. (1980). The demand for life insurance: An application of the economics of uncertainty. The Journal of Finance, 35(5), 1155-1172.
Cargill, T. F., & Troxel, T. E. (1979). Modeling life insurance savings: Some methodological issues. Journal of Risk and Insurance, 391-410.
Duker, J. M. (1969). Expenditures for life insurance among working-wife families. Journal of Risk and Insurance, 525-533.
Fitzgerald, J. (1987). The effects of social security on life insurance demand by married couples, Journal of Risk and Insurance, 54, 86-99.
Fortune, P. (1973). A theory of optimal life insurance: development and tests. The Journal of Finance 27 (3). 587-600.
Goldsmith, A. (1983). Household life cycle protection: human capital versus life insurance. Journal of Risk and Insurance 50(3). 33-44.
Gandolfi, A.S. and Miners, L. (1996). Gender-based differences in life insurance ownership. Journal of Risk and Insurance 63(4). 683-693.
Hau, A. (2000). Liquidity, estate liquidation, charitable motives, and life insurance demand by retired singles. Journal of Risk and Insurance, 67(1), 123-141.
Hwang, T. & Gao, S. (2003). The determinants of the demand for life insurance in an emerging economy: The case of China. Managerial Finance 29(5/6). 82–97.
Jabatan Perangkaan Malaysia. (2017). Retrieved Disember, 2017, from Portal Rasmi Jabatan Perangkaan Malaysia: https://www.dosm.gov.my/v1/index.php?r=column/cglossary2&menu_id=eWd2VFdIZ2xpdzBmT2Y0a0pweDcwQT09
Jones, G. (2012). Moral hazard and the impact of private health insurance on the utilisation of health care in Malaysia. Jurnal Ekonomi Malaysia, 46(2), 159-175.
Kakar, P., & Shukla, R. (2010). The determinants of demand for life insurance in an emerging economy—India. Margin: The Journal of Applied Economic Research, 4(1), 49-77.
Koeniger, W. (2004). Labor income risk and car insurance in the UK. The Geneva Papers on Risk and Insurance Theory, 29(1), 55-74.
Lee, S. J., Kwon, S. I., & Chung, S. Y. (2010). Determinants of household demand for insurance the case of Korea. The Geneva Papers on Risk and Insurance-Issues and Practice, 35(1), S82-S91.
Lenten, L. J., & Rulli, D. N. (2006). A time-series analysis of the demand for life insurance companies in Australia: An unobserved comp
In-Text Citation: (Bakri, Ramli, & Sulaiman, 2018)
To Cite this Article: Bakri, S. M., Ramli, N. R. @, & Sulaiman, N. A. (2018). Insurance Coverage amongst Low Income Households (B40) in Perak. International Journal of Academic Research in Business and Social Sciences, 8(11), 1733–1746.
Copyright: © 2018 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode
