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Lapsation of Policy: A Threat or Curse for Life Insurance Industry


Affiliations
1 RCP Institute of Management Research & Development, Shirpur, Dhule (M.S)
2 RCP Institute of Management Research & Development, Shirpur, Dhule (M.S)
     

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Life Insurance is a key driver for the economic growth of any nation. It is one of the important ingredients of the economic development of the country. Life Insurance selling often termed as dream selling or concept selling. Under the contract of life insurance the policy holder does not receive any physical product. All the benefits of life insurance will be derived at the latter stages of life such as long term return, retirement benefits etc. Hence the prospective policy holder takes some time while investing. In today's context, the orientation of every business is transformed from product concept to the customer concept. All the strategies are lying around the customer only. Thus each and every organization is aiming to capture the larger market share. It had been shown by the annual reports of IRDA that the Life insurance companies in the process of acquiring the new customer had losing major portion of the first year premium they collected every year towards the Lapsation of the policies. This is going to be the warning bell in the country like India where the insurance penetration is quite low. Thus in this paper an attempt has been made to find out the cause and effects relationship of the Lapsation of policy.

Keywords

Life Insurance, Dream Selling, Policy Holder, Physical Product, Lapsation
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  • Ajit Ranade and Rajeev Ahuja, Issues in Regulation of Insurance, Economic and Political Weekly, January 29, 2000, P.331-337.
  • Jagendra Kumar’s - LAPSATION OF A LIFE INSURANCE POLICY - Bimaquest - Vol. IX Issue II, July 2009.
  • Malhotra, Report of the Committee on Reforms in the Insurance Sector, Government of India, Ministry of Finance, Department of Economic Affairs, Insurance Division 1993 April.
  • Vikas Sharma & Dr. Sudhinder Singh Chowhan - A Comparative Study of Public & Private Life Insurance - Volume : 3 | Issue : 1 | January 2013 | ISSN - 2249-555X
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  • www.irda.org
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  • Lapsation of Policy: A Threat or Curse for Life Insurance Industry

Abstract Views: 283  |  PDF Views: 0

Authors

Sachin S. Surana
RCP Institute of Management Research & Development, Shirpur, Dhule (M.S)
Amar K. Gaur
RCP Institute of Management Research & Development, Shirpur, Dhule (M.S)

Abstract


Life Insurance is a key driver for the economic growth of any nation. It is one of the important ingredients of the economic development of the country. Life Insurance selling often termed as dream selling or concept selling. Under the contract of life insurance the policy holder does not receive any physical product. All the benefits of life insurance will be derived at the latter stages of life such as long term return, retirement benefits etc. Hence the prospective policy holder takes some time while investing. In today's context, the orientation of every business is transformed from product concept to the customer concept. All the strategies are lying around the customer only. Thus each and every organization is aiming to capture the larger market share. It had been shown by the annual reports of IRDA that the Life insurance companies in the process of acquiring the new customer had losing major portion of the first year premium they collected every year towards the Lapsation of the policies. This is going to be the warning bell in the country like India where the insurance penetration is quite low. Thus in this paper an attempt has been made to find out the cause and effects relationship of the Lapsation of policy.

Keywords


Life Insurance, Dream Selling, Policy Holder, Physical Product, Lapsation

References