Culture and Life Insurance Ownership: Is It an Issue?

Although life insurance consumption increases from low income group to high income group, there is a substantial variation in life insurance density across-country in each income group. The level of national income can explain peoples' ability to afford insurance, while cultural traits and the sociopolitical environment not only affect the amount of perceived risk and uncertainty but also influence people's attitudes and ways of handling perceived risks. The main objective of this paper is to review the definitions of culture to include dimensionalist and non-dimensionalist measures of culture and to investigate how national culture and the sociopolitical environment influence the level of life insurance pervasiveness. The results, based on a representative sample of emerging countries, show that the sociopolitical environment is clearly more important than the limited dimensionalist definition of culture.