Factors Affecting life Insurance Purchases: Evidence from Tehran City

This study develops a model of life insurance demand based on human capital, social and psychological factors. Data for this study was collected during 2010, by random sampling methods and questionnaires. Using the Heckman two-step selection model, our results show that the likelihood of purchasing life insurance among women is more than men. There is a negative and meaningful correlation between individuals’ heath status and their tendency to buy life insurance. However, some factors like guardianship and knowledge of life insurance may have a positive effect on individuals’ tendency to buy life insurance. Aging and having children less than 18 years old, decreases the demand for life insurance. Other factors like income, life expectancy and bequest, have a positive effect on the level of life insurance demand.