An Analysis of Consumers’ Demographic Characteristics on Buying Behaviour Factors towards Life and Health Insurance Policies

Abstract

The last two years taught us various lessons, including the importance of life security in such tough times. Life insurance is the cover that secures one’s future and provides a financial support. The Indian insurance industry is growing exponentially with the rising number of policyholders. Companies are offering policy options in both the public and private sector. Today’s Indian policy consumer is more aware and takes informed decisions while buying life insurance. Growing literacy, rising income, increasing spending capacity, and the availability of alternatives made the insurance industry an attractive avenue for security and investment. The paper aims to study the awareness level of insurance in respondents and to understand the behavioural aspects of insurance purchase decisions along with demographic factors of life and health insurance. The current study is descriptive in nature, based on primary data collected through a detailed structured questionnaire. The sample size for the study included 202 respondents from Solapur belonging to different gender, age and education groups. Appropriate statistical tools such as percentage, weighted average, rank correlation, chi-square and t-test have been used on the basis of demographic parameters to analyse the data. From the overall study, it can be concluded that for robust growth and deep penetration of insurance business, there is a need for customer-centric marketing strategies. The level of awareness about the type of insurance policy and about riders in a term plan is independent of demographic parameters such as gender, level of education, age and locality. Premiums and the return on investment are the prime factors considered while buying a life insurance policy. To avail good quality of medical treatment and risk coverage are primary reasons to prefer health insurance. Diseases waiting period, list of excluded items and no claim bonus are factors considered before buying a health insurance policy. The future growth of insurance sector will depend on, how effectively the insurers are capable of developing a consumer centric product, which is aptly designed to suit the context and how effectively they will be able to amend the perceptions of the Indian consumers and make them conscious of the insurable risks.

Keywords: Life Insurance, Health Insurance, Buying Behaviour, Demographic Factors, Sum Assured