CONSUMER AWARENESS TOWARDS LIFE INSURANCE SECTOR IN INDIA

Transcription

1 Volume 3, Issue 3 (March, 2014) Online ISSN Published by: Abhinav Publication Abhinav International Monthly Refereed Journal of Research in CONSUMER AWARENESS TOWARDS LIFE INSURANCE SECTOR IN INDIA S. Narender 1 Research Scholar, Department of Commerce and Business Management, Kakatiya University, Andhra Pradesh, India narendercommerce@gmail.com L. Sampath 2 Assistant Professor, St. John PG College, Yellapur, Hasanparthy, Andhra Pradesh, India lsp5683@gmail.com ABSTRACT Though the insurance industry is in existence since long, the level of awareness towards the rights and duties regarding insurance is negligible. The study tries to understand the awareness of the people towards the rights and duties towards life insurance products after the privatization of the insurance sector with special reference to Indian insurance sector. To actually understand this, a primary research was conducted to find out the level of awareness towards the rights and duties of the policy holders across demographic profiles and about the level of awareness towards life insurance policies prevailing in the Indian market. The study totally concentrates on the individual behavior, attitudes and also crating the awareness regarding their contribution on Indian insurance sector. Keywords: Awareness; Insurance; Investments; Policy Holder; Rights INTRODUCTION Life Insurance is a contract for payment of a sum of money to the person assured (or failing him/her, to the person entitled to receive the same) on the happening of the event induced against. Usually the contract provides for the payment of an amount on the date of maturity or at specified dates at periodic intervals or at unfortunate deaths, if it occurs earlier. Among other things, the contract also provides for the payment of premium periodically to the company by the assured. Life Insurance is universally acknowledge being an institution which eliminates 'risk', substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of the death of the breadwinner. By and large, Life Insurance's civilization's partial solutions to the problems caused by death. Life Insurance, in short, is concerned with two hazards that stand across the life-path of every person; that of dying prematurely leaving a dependent family to fend for itself and that of living to old age without visible means of support. The fundamental needs of insurance are as follows and the identified needs of individuals will be proximate of the following. Identification is important because it makes the process easier as one can choose from the spread the right product. The list is as Viz. security of family in case of death or disability, security of any loans on the assets in case of death and disability, children higher education, money saving for special future events and security for excess long ability. These are some fundamental insurance needs these are subjected to change in many customized deals. Awareness is the corner stone of sound information, for it makes the individual more effective and intelligent. Awareness is a vital necessity, because it enables the individual to develop and to rise on the society and increase their efficiency, through this awareness the individual thinking power increases. Available online on 45

2 REVIEW OF LITERATURE The researcher made an attempt to collect information from the prior researches and relevant studies conducted in the area of life insurance and consumer behavior so that the important variables for the study could be identified and analyzed. The review of literature has been presented in a summarized and precise manner life insurance and age has shown a significant relationship according to the some preliminary studies conducted in seventies and eighties. Berekson (1972), Showers and Shotick (1994), Baek and DeVaney (2005) found that the effect of age was positive and significant, but Ferber and Lee (1980),Bernheim (1991) and Chen et al. (2001) found a negative significant relationship between age and life insurance demand, whereas Hammond et al. (1967), Duker (1969) anderson and Nevin (1975), Burnett and Palmer (1984), Gandolfi and Miners (1996) argued that age was not a significant factor in purchase of life insurance. Bernheim (1991) used Probit, Tobit and Heckman model to investigate the impact of bequest motives on savings based on the estimates of the demand for life insurance, using the 1975 Longitudinal Retirement History Survey data. Most researchers such as Hammond et al. (1967), Ferber and Lee (1980), Burnett and Palmer (1984),Gandolfi and Miners (1996) and Baek and DeVaney (2005),agreed in their research that there is a positive relationship between education and life insurance demand. They recognized that those who have a better education will purchase more life insurance. Insurance purchased by households by using 2001 survey of Consumer Finance Data. They explained this positive relationship was due to a greater loss of human capital when the household head dies. Households with a head with greater education have potentially higher incomes. The death of such a household head will bring more financial loss to the family as compared with those with lower education. Hence, the purchase of life insurance for those with greater education increases as the value of the lost human capital increases. Baek and DeVaney (2005), Anderson and Nevin (1975), found a negative association between education and the amount of life insurance purchased. The authors explained that higher educated people may believe that inflation often decreases the cash value of life insurance from a savings standpoint and hence declines their need for life insurance. (Nevin, 1975),Zhu (2007) studied an individual choices on the purchase of life insurance and the purchase of stocks using one-period and two-period models. Zhu argued that when an individual decided.the purchase of life insurance and stocks would consider his personal circumstances, such as wealth, future income, health status and survival probability, attitudes toward risk and bequest. Zhu found that an increased probability of surviving encouraged the individual to hold more life insurance. OBJECTIVES OF THE STUDY The proposed study under taken with the main objective of knowing the importance of life insurance in any Company the other allied objectives are 1. To make the customer awareness in the life insurance 2. Stating the primary function of insurance and how it is achieved. 3. To explain the benefits of life insurance enjoyed by the individuals. 4. The analysis is made with a view of identifying companies having growth, potential and a sound financial base. 5. To know the judge and the satisfaction of the customer in using the life insurance. DATA SOURCES AND METHODOLOGY The primary data is very important source for to make suggestions to the title obtained. This data can be collected in various methods like Survey, Interviewing, Feedback i.e., Group discussion etc., for collection of primary data the survey method is used, which involved predetermined questions. The structured questionnaire contained a list of questions framed so as to get the facts. But it involves high risk and huge expensive method to get the facts. Surveys based on personal interviews are suitable when detailed information to be collected. Collection of secondary data is very easy compared with VOL. 3, ISSUE 3 (March 2014) 46

3 primary data. But this data is also important for the growth of an organization, to predict the future and will help to make the future plan regarding to improve the measure of sales. This data can be collected from the magazines, annual reports of the organization and the published data. The sample size consists of 100 people. The sample consists of businessman, doctors, lawyers, engineers, officers and contractors etc., the survey was conducted in the form of an interview among randomly chosen sample of 100 people. While analyzing an interpretation of data sample statistical techniques like average, percentage have been used. For graphical representations simple pie diagrams have been used. LIMITATIONS OF THE STUDY The survey is conducted in Hyderabad, Warangal only due to lack of time it is not extended to nearby districts. Since the sample size is 100, the data may not represent the accurate results. The views expressed by the consumers may not be 100 percent true DATA ANALYSIS AND INTERPRETATION Table 1. Believe in Money Planning 1 YES NO 8 8 It is observed that 92% of the respondents believe in money planning and rest which is 8% they don t believe in money planning. Table 2. Various Type of Money Planning 1 savings Fixed Deposit Insurance PPF Others From the above data collected 35% respondents believe in savings, 15% in fixed deposits, 28% in insurance, 7% in provident fund and other 15% in other money planning. Table 3. Planning For Retirement 1 YES NO It is concluded that from the above data 74% of the respondents make their money plan for their retirement and 26% doesn t have any money plan for retirement. The next to the cadre goes to the people between the age group of years. This shows that Hyundai also acts as a convenient car for adult people, followed by people using the car falling under VOL. 3, ISSUE 3 (March 2014) 47

4 age group of above 50 years. This shows that Hyundai acts as a convenient car for people with the age group of years and also to the age-old people, who are above 50 years. Table 4. Production after Retirement 1 savings Fixed Deposit Insurance PPF Others We are coming to a conclusion that, people who are mostly knowing about is through is any other means of Promotion (42%), next highest is the awareness through Friends the third position is occupied by promotion through News Paper Ads followed by Campaigning It conclude that after their retirement opt for savings, opt fixed deposit, opt for insurance, opt provident fund and remaining opt for other money planning. Table 5. Important For Education Fund 1 Very Important Important Not Important About of the sample considered the Pre-purchase Service to be Good is followed by, considering being Fair and about of sample considering to the Pre-purchase Service is Poor and is Very Poor. It is observed that 57% said it is very important another 29% said it is important and remaining 14% said it is not important. Table 6. Importance for Marriage Fund 1 Very Important Important Not Important It is observed that said it is very important another 30% said it is important and remaining said it is not important. It is concluded that of the sample is considering that the Order Processing time is Excellent. of sample is considering that the Order Processing time offered by Hyundai Good, followed by 11% of the sample is considering is Fair and of the sample is considering it to be Poor. VOL. 3, ISSUE 3 (March 2014) 48

5 Table 7. Aware of Life Insurance 1 YES NO From the above collected data of the respondents are aware of insurance and of the respondents are not aware of insurance, it is conclude that most of them knew about insurance It is concluded that of the sample is considering that the Payment terms is Excellent and Good.of the sample is considering that the Payment terms to be Fair and of the sample is considering is Poor and of the sample is considering it to be very poor. Table 8. Insurance is needed for Your Family 1 YES NO In my survey 73% of the respondents said that they need insurance for their family and the remaining 27% think it is not necessary. It is concluded that 52% of the sample is considering that the Credit facilities is Excellent. 26% of the sample is considering that the Credit facilities are Good and 22% of the sample is considering it to be Poor. Table 9. Number of Policy Holders in Different Life Insurance Companies 1 YES NO It is observed that 68% of the respondents are issued and remaining 32% of them are not insured. We have come to the conclusion that the Quality of service at workshop provided by is Excellent About 39% of the sample is considering the services to be Good, followed by of the respondents are considering the service is Fair. The least percentage i.e., of the sample is considering the service as Poor Table 10. Importance of Insurance Policy 1 Protection for Dependents Protection for Education Protection fro Marriage Protection for Estate Duties Others From the above data 33% of the policy holders take the policy to protect his/her dependents, 26% of them protection for education fund, 18% of them protection for marriage fund, 7% of them protection for Estate duties and remaining for other facilities. VOL. 3, ISSUE 3 (March 2014) 49

6 Table 11. Attraction For Taking The Policy 1 Interest & Dividends Customer Service Various plans Others From the above data the percentage of respondents are attracted by seeing interest and dividend are 43% customer service 12% various plans, Others 18%. FINDINGS In saving for future need 92% of the people are agreed for savings and remaining 8% of the survey most of the people are unmarried For saving their money 35% 9of the people select banks28% of them are go to life insurance, 15% of them go to FDS and 7% of them are go to PPF. For the, most of the people are educated, remaining marriage and other needs. In preference of saving 30% of the response go for short term benefits, because they spend their money for entertainment and remaining marriage and other needs. For retirement life 74% of the response are agreed, because most of them are private employees and they planned for their old age, remaining 26% of them are not planning their retirement. In the matter of life insurance most of the people prefer this, because they want security for their family and remaining are not comment. In the process of multiplying and saving the life most of the people are feel it is a commitment and remaining are nit commented. In the process of paying premiums in life most of the people are feel it is a commitment and remaining are not commented. For the security of their life most of the people are saving the large amount in thei9r income and remaining are saving a little amount. In rating moist of the people given first preference to their life cover because it is most useful for their family after his/her death some people given second preference for their health and accidental benefits and some mote prefer children s welfare. IN the process of priority of financial requirements most of the people planning to for house some people planning to game the same income even after their retirement and some people are plan for their children s welfare. When we asked about different products In life insurance most of the people respond positively because they believe it is secure their life and some they don t comment. In the survey most of the people are feel they are exactly insured, and remaining people are under insurer. VOL. 3, ISSUE 3 (March 2014) 50

7 CONCLUSION This study has been conducted with the aim of finding the customer financial needs. From this study it has been revealed that the customer major financial need in future is their children s education and marriage expenses. Hence the company should adopt some good and beneficial policy for their future estimates, which will really helpful for the customer. It also found from the study that the major competitor in insurance sector is LIC, Because of its brand loyalty. Though the insurance sector group is one of the leading insurance sectors in the world, it should improve its marketing strategies to maintain the good status in our own country. The study has been conducted very sincerely to make the research useful to the company. I wish them all the very best to their future endeavors. REFERENCES 1. Del I Hawkins, Roger J Best, Kenneth A Coney, Amit Mukherjee (2007). Consumer Behaviour. Tata McGrawhill. 2. Schiffman Lenon G., & Kanuk Leslie Lazar (2006). Consumer Behaviour. Prentice Hall of India. 3. Loudon David L. & Bitta Albert J. Della., (2004). Consumer Behaviour. Second ed. Mc-Grawhill. 4. Schiffman Lenon G., & Kanuk Leslie Lazar (2006). Consumer Behaviour. Prentice Hall of India. 5. Batra, S, K & Kazmi, S.H.H., (2008). Consumer Behavior. Excel Books. 6. Philip Kotler, (2000, 2002 and 2008). Marketing Management. Prentice Hall of India. 7. Lovelock, C. H. & Writz J., (2003). Services Marketing. Prentice Hall of India. 8. Lovelock, C. H. (2010). Services Marketing. Pearson Education. 9. Narayanan, H. (.2010). Indian Insurance A Profile. Jaico Publications. 10. L.M.Bhole & Jitendra Mahakud, (2009). Financial Institutions and Markets (Fifth ed). Tata McGraw-Hill. 11. BCG Study (2010). Retrieved on 4, April, Berekson, L.L. (1971). Birth order, anxiety, affiliation and purchase of life insurance. Journal of Risk and Insurance, 1972, 39, Showers, Vince E. & Joyce A. Shotick (1994). The Effects of Household Characteristics on Demand for Insurance: A Tobit Analysis, The Journal of Risk and Insurance, Vol. 61, No.3, Baek, E. & DeVancy, S.A. (2005). Human Capital Bequest Motive Risk and The Purchase of Life Insurance, Journal of Personal Finance, 4 (2) WEBSITES: VOL. 3, ISSUE 3 (March 2014) 51