ACCEPTABILITY OF LIFE INSURANCE BY INDIAN CUSTOMERS
In India insurance is a flourishing industry, with several national and international players competing to excel. With several reforms and policy regulations, the Indian insurance sector has witnessed tremendous growth in the recent past. Insurance can be defined as a “legal contract between two parties whereby one party called insurer undertakes to pay a fixed amount of money on the happening of a particular event, which may be certain or uncertain.” The other party called insured pays in exchange a fixed sum known as premium. Insurance is desired to safeguard oneself and one’s family against possible losses on account of risks and perils. It provides financial compensation for the losses suffered due to the happening of any unforeseen events. Life insurance provides financial security to the family of a policyholder in the event of his/her death. This is the most popular insurance policy, as most people want to ensure that their family members remain financially secure in the event of their death. Till date, only 20% of the total insurable population of India is covered under various life insurance schemes, the penetration rates of health and other non-life insurances in India is also well below the international level. These facts indicate the of immense growth potential of the insurance sector. At present there are 22 life insurance companies at present offering different products to suit to the needs of the customers. Life Insurance contracts not only allows an individual to have a risk cover against any unfortunate event of the future but also provides for educational needs, retirement needs, loans, tax planning, investment option and savings. The customers prefer to invest their money in a number of alternatives such as post office savings, fixed deposits, mutual funds, share market, insurance, bonds etc. Also, the returns they expect and their frequency of investment varies. The individuals may be equal in all aspects, may even be living next door, but their financial planning needs are very different. The investment preference is influenced by various demographic factors such as family size, age, gender, occupation, educational qualification, income size etc. Given the dynamism in new offerings it becomes very important to analyze the association between demographics of individual investors and their investment behavior and also analyzing the acceptance of insurance by them. Furthermore it is equally necessary to evaluate the importance accorded to various factors before going for insurance. LITERATURE REVIEW
It has been observed that insurance agents should constantly monitor the level of satisfaction among his/her customers to keep themselves close to the customers for fulfilling their needs (Joseph et al., 2003). Ennew et al. (1993) indicated that a comparison of mean scores on the importance of service attributes provides a very effective method of measuring the ability of services to meet the needs of the customers. Perceived service quality has a significant effect on the attitude towards obtaining insurance (Arora and Stoner, 1996). Moreover, the degree of success in the implementation of enterprise mobilization in the life insurance industry is positively correlated to the management performance of external aspects like providing increased customer satisfaction (Luarn et al., 2003). Customer satisfaction and the salesperson’s relation orientation significantly influences the future business opportunities and as the salespersons are able to enhance their relationships with the clients, clients are more satisfied and are more willing to trust, and thus secures the long-term demand for the services (Tam and Wong, 2001). Hellier et al. (2003) found that in insurance purchase brand preference is an intervening factor between customer satisfaction and repurchase intention and the...
Please join StudyMode to read the full document