WHY SHOULD ONE INVEST IN A LIFE INSURANCE PRODUCT? AN EMPIRICAL STUDY

Abstract

Life insurance as a product is always one of the toughest to sell. Though one can argue about its benefits in the long term, in this modern materialistic world, customers are getting very cautious about their investments and the returns out of it. In this study, an attempt was made to make the customers aware of various aspects of a life insurance product and their respective opinions regarding the policy. Various demographic characteristics of the policy holders e.g. age, gender, income, education, occupation etc. and their impact on the customers’ perceptions regarding the product were explored. The various aspects involved in a life insurance product as per their importance to the policy holders can be outlined as: A tax saving plan; a saving scheme with good return; financial security for the family; Risk coverage; Save for green patch (Pension), to cover the risk of living too long; and, to make black money in to white. The study focused on two life insurers: LIC and HDFC Life Insurance operating in Rajasthan. A sample size of 215 life insurance customers was planned. The data was collected through primary sources through a structured questionnaire. Data was analyzed using SPSS 17.0 and MS Excel - 2007. ANOVA and t-Test were used to examine the differences among various groups of respondents. Though the study was handicapped by limited sample size (both geographical as well as periodical), it can be amplified as per the national scenario with some specific modifications. This study will help the insurance companies and the regulators in developing a better life insurance product.