Analysis of factors that cause lapsing of life insurance policies in Uganda: a case study of UAP old mutual Uganda
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The purpose of this study was to assess the factors that cause lapsing of life insurance policies in Uganda. The rising incidents of policy lapse is an increasing concern to the insurance industry of Uganda. The study investigated the demographic factors of policyholders who lapsed their policies. It therefore aims to find out whether age, employment status, gender and marital status have a significant relationship on lapsing of life insurance policies. Secondary data from UAP Old Mutual Uganda was used and analyzed in Stata 15.0. Descriptive statistics were used to describe the data while statistical tests were carried out by the use of Pearson chi-square and logistic regression. These tests were conducted at 95% confidence level. The study established that gender and employment status were very important socio demographic moderators in the decision to lapse policies. In the results majority of the males lapsed their policies (69.23%), minority of females lapsed their policies (41.94%), majority of the married policyholder lapsed their policies (55.17%), minority of the employed policyholders lapsed their policies (21.62%), majority of the unemployed individuals lapsed their policies (84.75%), majority of the individuals that lapse their policies were in the age range of 40-49 years. In the multivariate analysis, policy lapsing was influenced by gender (OR= 0.0181649) and employment status (OR= 0.00094146). The findings indicate the need to educate individuals on the importance of life insurance and the various insurance products available to enable them choose the suitable products for themselves.