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A Study on Factors Affecting Need Recognition for Life Insurance Policies in Chennai
Background/Objectives: This study examines the factors influencing need recognition of Life Insurance Policies on purchase of different types of plan and role of family life cycle in purchase decision of insurance policies.
Methods/Statistical analysis: The 500 life insurance policy holders of Life Insurance Corporation (LIC) are chosen as test sample through multi stage random sampling technique. The frequency and percentage analysis are carried out to understand the demographic profile. The exploratory factor analysis, ANOVA (Analysis of Variance) and the multiple regression analysis are done to examine the influence of factors affecting need recognition for life insurance policies on purchase of types of plan.
Findings: The study reveals that majority of life insurance policy holders are males and most of life insurance policy holders belong to the family life cycle of Bachelor Type. Most of life insurance policy holders are graduates and majority of life insurance policy holders are employed in private sector. Most of life insurance policy holders belong to the monthly income group of Rs. 20001 - 30000 and majority of life insurance policy holders are married.
The exploratory factor analysis shows that social security, peer influence, prosperity and safety are the factors affecting need recognition for life insurance policies. There is significant difference between demographic profile of life insurance policy holders and factors affecting need recognition for life insurance policies except gender and factors affecting need recognition for life insurance policies. The regression analysis indicates that social security, prosperity and safety are positively and significantly influencing the purchase of type of plan.
Application/Improvements: The insurance products of LIC should be designed and promoted as per the needs of the valuable policy holders. Since the family life cycle is the most important factor deciding the purchasing of life insurance policies, LIC should develop and market separate insurance policies for different stages of life cycle of policy holders.
Keywords
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