Ageing and the Demand for Life Insurance : An Empirical Investigation using French Panel Data

The age structure of the French population has been experiencing dramatic changes over the past decades and is likely to do so in a near future. The increasing proportion of elder people may modify the saving behaviour of French households. The level of saving, as well as its composition, may be altered by ageing of the French population. This paper investigates the relationship between age structure and the demand for life insurance products using an econometric estimation of French survey data (Patrimoine 1998 of the National Institute of Statistics and Economic Studies (INSEE)). More precisely, we try to identify the significant demographic, economic and financial factors influencing this demand (age, income, household wealth, marital status, occupational status and education…). Following a methodology developed in a companion article, this paper begins with a characterisation of household accumulation profile in France. The paper then estimates a Probit model to exhibit the determinants of the probability of life insurance holding, and an ordinary least squares procedure to explain the amount of wealth held in life insurance, according to the previously identified significant variables. The results suggest a robust relationship between demographic structure and the demand for life insurance.