indian consumer demeanor for life insurance

1. Research Explorer January - June 201527
Vol. IV : Issue 10 ISSN : 2250-1940 (Print), 2349 - 1647 (Online)
Introduction
Human life is a most important asset and life
insurance is the most important type of insurance,
which provides financial protection to a person and
his family at the time of uncertain risks or damage.
Life insurance provides bothsafetyand protection to
individualsandencouragessavingsamongpeople. Life
insuranceisnecessaryfor everyone becauselife isvery
precious.Withapopulationofoveronebillion, national
and internationallife insurance companies, see India
as a land of opportunities and a market for big
business. Until 1999, the business of life insurance
India wasthe monopolyoflifeinsurance Corporation
ofIndia(lic).Privatizationwitnesseddynamicchanges
in the insurance industry and most of the private
insurancecompaniesarejointventureswithrecognized
INDIAN CONSUMER DEMEANOR FOR LIFE INSURANCE
C. Kalpana Naidu
Research Scholar, Bharathiar University, Coimbatore
Assistant Professor, Women’s Christian College, Chennai
Dr. C. Paramasivan
Assistant Professor & Research Supervisor,
Periyar EVR College, Tiruchirappalli
ABSTRACT
Consumer Demeanor is the study of when, why, how, and where people do or do not buy a products/services. It
blends elements from psychology, sociology, social anthropology, and economics. The study of consumer behavior
provides marketers to understand and predict the future market behavior. The insurance industry is one of the
fastest growing industries in the country and offers abundance growth opportunity to the life insurers. When
compared with the developed foreign countries, the Indian life insurance industry has achieved only a little
because of the lack of insurance awareness, ineffective marketing strategies, poor affordability and lowinvestment
in life insurance products. The huge and ever rising population levels in our country provide an attractive
opportunity but still nearly 70% Indian lives is un-insured. The study is basically intended to discover and
examine the factors affecting customer decision towards investment in life insurance policy. The study also
intends to evaluate preferences of the customers while taking life insurance investment decision and to rank the
factors responsible for the selection of life insurance as an investment option.
Key Words: Consumer Demeanor, Life insurance, investment option, insurance industry
foreign players across the globe. Customers are the
mainpillar oflife insurance business. Everycompany
tries to attract and retain existing customers to keep
their profits high. The proper understanding of
customers,theirneeds,andexpectationshelpinsurance
providers to bring improvement in product as wellas
services offered. Whencompared withthe developed
foreigncountries,the Indianlifeinsuranceindustryhas
achieved only a little because of low consumer
awareness, poor affordability, delayed customer
services, lackofsuitableproducts. Intoday’scut throat
competition, it becomes essentialfor life insurers to
provide better customer services, spread more
awareness, emphasis on need based innovative
productsandreasonableprice. So that,everyindividual
mayavailthe benefits ofinsurance and protect their
livesagainstfutureuncertainties.
Available online @ www.selptrust.org
Research Explorer
ISSN : 2250-1940 (Print), 2349 - 1647 (Online)
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Vol. IV : Issue.10 ; January - June 2015

2. Research Explorer January - June 201528
Vol. IV : Issue 10 ISSN : 2250-1940 (Print), 2349 - 1647 (Online)
Reason for Buying Life Insurance Products
Insurance is designed to protect a person and
the familyfromdisasters and financialburdens. There
are some important reasons which plays a very vital
role inpurchase decisionsand buyingoflife insurance
products, are as follows:
• Life insurance provide funds to the family, leaves
behind a one’s and serves as a cash resource, on
premature death.
• It can have a savings or pension component that
providesduringthe retirement.
• Some policieshave riders like coverage ofcritical
illness orterminsurancefor thechildrenor spouse.
• Having a valid insurance policy is considered as
financial assets which improves the credit rating
when one’s need health insurance or a home or
business loan.
• Termlifeinsurance has double benefits, it protects
and one can get their moneyback during strategic
points intheirlife.
• It cancontributetowardsmaintainingafamily’slife
style whenonecontributing partner suddenlydies.
Factors Influencing Customer Investment
Decision in LifeInsurance Demographic Factors
Demographicsarethestatisticalcharacteristics
of human populations, such as age, income,s ex,
occupation, education, family size, etc that are used
bybusinesses to identifymarkets for their goods and
services. Theexplanationsofthedemographicfactors
on the customers for life insurance industry are as
follows:
Education:
It is expected that education has a positive
relationship withthedemand for insurance. Educated
people understand the necessity of protecting
dependents frompremature deathofwageearnersand
the various typesoflife insurance products.
Income:
Income is one of the most important factors
that can affect the demand for life insurance. All
previous studies have revealed that familyincome is
positivelyrelated to life insurance ownership.
Size of Family:
It is usually expected that formation of
householdincreaseinlifeinsurancepurchases, because
intensityfor bequests tends to increase as people get
married or havechildren. Size offamilyis expected to
have a positive relationship with purchase for life
insurance products.
Employment:
Employment is expected to be positively
related to the life insurance purchase, because life
insurance is usually purchased to prevent from
uncertaintyabout wage earners’pre-retirement.
Other factors:
Other demographic factors such as sex, race
and religious preference were suggested to be
meaningful factors that can affect demand for
insurance. Inaddition, psychographic variables also
affects onthedemand for insurance.
Thusdemographicalfactorhasthemajoreffect
in the purchase decision of the customer. The
leadership liesnot ingetting themaximumpolicysold
but inunderstanding thedemographyofthecustomer
and targeting themintheirway. Finally, the success of
insurance marketing depends on understanding the
socialandculturalneeds ofthetarget population.
Preference of the Policyholders
Majority of the policy holders prefer
government-owned Life insurance companies for
getting insuredbecause ofsecurity. The other private
lifeinsurancecompanies are havinglesspercentage of
share and those who prefer private insurers are
because ofbetter customer services and high returns.
Type of Policy
There are various types of life insurance
policies withcustomizedfeatures and value additions
catering to the needs ofspecifictarget segments. That
a majorityofthe policyholders preferred moneyback
policy, followed by unit linked plans and then
endowment plans. Veryfew policyholders preferred
termplans. Thusit can depict that among manyplans
available, the most preferred one among the mass is
money back plan. This plan helps you to withdraw
yourmoneyatregularintervalsandstillstayinginsured.

3. Research Explorer January - June 201529
Vol. IV : Issue 10 ISSN : 2250-1940 (Print), 2349 - 1647 (Online)
Thisplanisfamousforitshighliquidityadvantage. The
other product gaining popularityis ulip’s (unit linked
insurance plan), as its serve multiple purpose, it give
high returns, taxbenefit, life insurance, criticalillness
cover and is admired for its flexibility for paying
premiumamount.
The Most Attractive Features of Policy
A majorityofthe policyholders believes that
companyreputationis the most influencing factor in
policybuyingdecision,followedbythefactorof money
back guarantee and then the factor of larger risk
coverage. Minorityofthepolicyholdersareinfluenced
with low premium rates and easy access to agents
respectively. Hencereputationofcompanyisthe main
influencing factorduringpolicypurchasing decision.
People Would Look For Insurance Company
Majorityofthe respondents look for a trusted name
in a companyfor insurance then policyholders look
for good plans and then for a friendly service and
responsiveness. Very few look for an ease of
accessibilityina companyfor insurance. Hence it can
be inferred that trust is veryimportant factor, whicha
majorityofcustomerslooks beforebuyingpolicyfrom
aninsurance company.
Ranking Various Factors Responsible for
Investment in Life Insurance Products
Duringthestudy,itwasfoundthattheinvestors
generallyinvested inlife insurance due to the reasons
liketaxbenefit, riskcoverage, saving,return, insurance
services, premiumcharges, security. Majorityof the
respondents invest in life insurance for tax benefit,
followed by the risk coverage & saving, premium
charges, security with high return and insurance
services can be ranked as 1st, 2nd, 3rd, 4th and 5th
respectively. Thus it canbe depicted that taxbenefit is
themainconcernofcustomerswhilemakinginvestment
ininsurance policy.
Conclusion
Lifeinsuranceisanimportantformofinsurance
andessentialforeveryindividual. Withthe openingup
ofinsurance sector, so many players have entered in
the IndianInsurance Industry. This industryhas been
progressing at a rapid growth. Insurance sector
provides somesecurityto the consumer for anytype
ofmisshappening. Life insurance penetrationinIndia
is very low as compare to developed nation where
almost allthelives are covered andstage ofsaturation
has been reached. Customers are the realpillar ofthe
successoflifeinsurancebusinessandthusit’simportant
for insurers to keep their policyholders satisfied and
retained as longas possible and also get new business
out ofit byoffering need based innovative products.
This studyreveals that manyfactorshave aninfluence
in the purchase decision of the customer. Out of all
these factors, which affect customers investment
decision inlife insurance, demographic factorsofthe
people play a major and pivotal role in deciding the
purchase oflife insurance policies.
References
1. www.lic.com
2. www.lio.com
3. www.irda.com
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Research Explorer is 30 th
October 2015