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A STUDY ON PERCEPTION OF
INVESTOR’S INVESTMENT IN LIFE
INSURANCE

PROF.CHINTAN PRAJAPATI DR. DIVYANG JOSHI

ASSISTANTPROFESSOR ASSISTANTPROFESSOR

KirtiPurohit HardikTavdi DimpleNandu Bhavin Patel

Student– MBA- Student –MBA- Student – MBA- Student – MBA-

Finance,PIET Finance,PIET Finance,PIET Finance, PIET

ParulUniversity ParulUniversity ParulUniversity ParulUniversity

ABSTRACT

Insurance is related to the protection, every human being has the tendency to save or protect
himself or his family from risks or events in future. Insurance is one kind of protection where
people try to keep themselves safe from the risk or future uncertainties. Investments are both
important and useful in the context of present day conditions of the economy. The descriptive
based study was selected with an objective to identify the perception of investors towards Life
Insurance. Various insurance related factors have been discussed in the paper. The data for the
study has been collected from both primary and secondary sources. The study area is limited
only to vadodara and sample size is150.

KEYWORDS

Life Insurance Policies, Investors Perception, Investment, Protection of Family, Financial

Security.

INTRODUCTION

Life insurance is a contract between an individual or organization (insurance policy holder) and
an insurer (insurance company). The policyholder pays the policy premium and the insurer

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promises to pay a designated beneficiary a sum of money upon the occurrence of an insured
event. Depending on the contract, events such as terminal or critical illness may also trigger
payment. The core benefit of life insurance is that the financial interests of one’s family (e.g.)
children’s education, remain protected from circumstances such as loss of income due to critical
illness or death of the policyholder. An investor an individual who commits money to investment
products with the expectation of financial return. Generally, the primary concern of an investor is
to minimize risk while maximizing return, as opposed to a speculator, who is willing to accept a
higher level of risk in the hopes of collecting higher-than average profits. Investors‟ behavior is
the study of how individuals make decision to spend their available resources (time, money and
efforts) on investment related items. It helps the marketers to understand what, why, where,
when and how an investor behaves with respect to products and services. Knowing answer to this
question let marketers to design their marketing strategies accordingly.

The insurance has become a part of human life. It is not restricted to life, marine or fire only, but
has spread over to almost every sphere of human activity. For example, a singer can insure his or
her throat, a dancer her legs and an actress her nails etc. So the scope of insurance is unlimited.
The significance of the insurance is not only limited to an individual or to a family alone but it
has spread over the entire nervous system of a business or say the country as a whole.

OBJECTIVES OF THE STUDY

1. To understand the perception levels of the investors towards the life insurancepolicies.
2. To observe the impact of various affecting factors on the purchasing behavior of the
investors.
3. To measure the satisfaction levels of the investors towards to the services provided by the
life insurancecompany.
4. To determine the awareness level of investors regarding life insurance policies and the
number of investors who have actually invested in life insurancepolicies.

LITERATURE REVIEW

1) Athma. P and kumar. R (2007)in the research paper titled “an explorative study of life
insurance purchase decision making: influence of product and non-product factors". The
empirical based study conducted on 200 sample size comprising of both rural and urban
market. The various product and non-product related factors have been identified and
their impact on life insurance purchase decision-making has been analyzed. Based on the
survey analysis; urban market is more influenced with product based factors like risk
coverage, tax benefits, return etc. Whereas rural population is influenced with non-
product related factors such as: credibility of agent, company’s reputation, trust, customer
services. Company goodwill and money back guarantee attracts many people for life
insurance.

2) Girish kumar and eldhose (2008), published in insurance chronicle icfai monthly
magazine august 2008 in their paper titled "customer perception on life insurance
services:acomparativestudyofpublicandprivatesectors",wellexplainedthe

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importance of quality services and its significance in raising customer satisfaction level.
A comparative study of public and private sectors help in understanding the customer
perception, satisfaction and awareness on various life insuranceservices.

3) Narayan. H. Jai (2009), in an article has made an emphasis on importance of customer

in the business of insurance. He explained in phase of growing market competition, there
is an intense need to go beyond mere efficiency in designing products. To understand the
customer’s needs and to convey what they have to offer would perhaps bring in higher
efficiencies in customer service. Insurance business revolves around the customer and
fair treatment to customers is need of an hour to win their loyalty and trust. In a service
based organizations, customer service is the most dominating feature that differentiate
and gives good return to the insurers. Proper dealing with customer complaints,
effective customer grievances handling mechanism and fast claim settlement procedure
are some of the ways through which satisfaction level of customers can be increased.
Hence to serve the customers promptly and effectively is the key success of a life
insurancebusiness.

4) Uma, Selvanayaki & Shankar (2011)based their article titled „A Survey of Life
Insurance Customer’s Awareness, Perception and Preferences‟ on the survey of 100
customers of life Insurance policies, carried out in Coimbatore. It throws light on various
aspects related to customers' awareness, perception and preferences pertaining to life
insurance. The primary objectives of this survey were to find preferences of customer’s
towards various life Insurance policies, factors influencing choice of life Insurance policy
and awareness about life Insurancebrands.

5) M.Selva Kumar and J Vimal Priyan(2012)concluded that LIC continues to dominate

insurance sector. Private sector insurance companies also tried to increase their market
share. Life insurance has today become a mainstay of any market economy since it offers
plenty of scope for garnering large sums of money for long periods of time. The study
compared premium, policies and market shares ofcompanies.

6) Kalani, Salunkhe and Ahirrao (2013)examined claim settlement ratio of LIC with other
insurance companies in India. Study observed that there are cases of frauds in claim
settlement that may happened but if the policyholder uses proper precautions he will
prevent himself from fraud. LIC of India provides better corporate services for settling
the customers claim. D-mat may improve transparency and efficiency of the claim
settlement. Authors studied comparison of claim settlement ratio of LIC with other life
insurance industry and survey of policyholders and opinion regarding claimsettlement.

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7) Piyali Chandra Khan and Mitra D(2014)analyzed that the overall position of LICI was
found to be quite satisfactory as the profit after tax improved by 270% in the last 12
years. It had strong liquidity position. The company had sufficient current assets to meet
the current liabilities. This resembles that LICI is quite capable to earn superior return in
this competitiveenvironment.

8) Bhagabat Barik et. al. (2014)discussed the emerging trends in insurance and highlighted
that there is a need of highly skilled professional advisory in Indian insurance industry,
balanced marketing mix, policy administration and as far as possible re- engineering of
the business model. Analyzed the different factors that determine the investment in LI
policies and the result given was the trustEffective and good plans were the main reasons
to invest in LI among thecustomers.

9) Balasubramanyam (2015)focused on the overall development of insurance companies

in India and proposed that the insurance industry should offer its customers tailor made
products to satisfy their financial needs in thefuture.

10) SHEKAR CHANDRA(2016)in his article ‘future strategies for life insurance”.
Discussed various issues relating to life insurance. He has given detailed note about new
kinds of products and intimacy with the constant technology adoption for survival as well
as for consistent growth. Marketer is not simply to have a relationship with buyer but also
to build the relationship with buyer but also to build the relationship with buyer in the
form of linking the brand to a particular need, associating it with a pleasant mood,
appealing to sub conscious motives conditioning buyers to prefer the brand the brand
through reward penetrating perceptual and cognitive barriers to create preferences and
providing attractive models forbuyers.

RESEARCH METHODOLOGY

1. RESEARCH DESIGN: In this project, descriptive research have been used. Descriptive
research technique is concerned with describing the characteristics of particular
individual orgroup.
2. SOURCES OF DATA: We have collected the various information from various websites,
journals, newspapers andarticles.
3. DATA COLLECTION METHOD: For this research we have collected both the primary
as well as secondary data method.
4. POPULATION: In this research we have assumed total population withinVadodara.
5. SAMPLE SIZE: For this research the sample size is 150, which includes investors who
invest in lifeinsurance.
6. DATA COLLECTION INSTRUMENT: In instrument we have used articles, research
papers, internet and various websites have been visited and data have been referenced
fromthem.
7. SAMPLING TECHNIQUE: The sampling technique that adapted to conduct the survey

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was convenient randomsampling.

DATA ANALYSIS

1. Gender

49.33 MALE
50.67 FEMAL
E

2. Age

Sales
3
%
6
% Below 30
17% 31-40
41-50
59 51-60
15 %
% Abpve
60

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3. Occupation

9.87

35.53
Student
25.66 Service
Self Employed
Government Employed

28.95

4. AnnualIncome

7.95

37.75 Below 2.5 lakh

22.52
2.5-5lake
5-7.5lakh
Above 7.5
lakh

31.79

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5. What scheme of insurance policy have youtaken?

Pension funds 4.5

Endowment plus 10

Money back 30

Whole life 50.67

0 10 20 30 40 50 60

6. What kind of investment do youprefer?

Not applicable 8.67

Both 25.33

Long term 36.67

Short term 29.33

0 5 10 15 20 25 30 35 40

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7. Are you aware about all the life insurancepolicy?

no 52.29

yes 47.71

45 46 47 48 49 50 51 52 53

8. Which is the most rationalreason?

Tax benefits 4.5

Child 14
welfare

Individual risk 32
coverage

Risk coverage of 46.67

family

0 10 20 30 40 50

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9. What would you like more in life insurancepolicy?

Tax benefits 28

Great return 16

Future security 30

Financial 4.3
safety

0 5 10 15 20 25 30 35

10. If you will get a chance to invest money in further investment will you invest init?

no 19.74

yes 80.26

0 10 20 30 40 50 60 70 80 90

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11. What is your overall perception about life insurancepolicies?

Series
1
Nagative 4.10

Series 1
Positive 95.90

0 20 40 60 80 100 120

Conclusion

This study attempted to identify the satisfaction level of investors invest in life insurance policies
provided by the life insurance companies. The findings of the study shows that insurance is a tool by
which fatalities of a small number are compensated out of funds collected from plenteous. Insurance is a
safeguard against uncertain events that may occur in future. Thus, the study also comprise company
image is highly important criteria that consumers consider before taking up life insurance policy. This is
mainly because people expect safety and security of their money which they have invest in life insurance
policy, followed by the factor premium which we pay to the insurer and then bonus and interest paid by
the company, services etc.

Findings

Out of 150 respondents 74 are male and 76 are female. That’s mean the female have more
knowledge about life insurance policies and having more knowledge about the services
provided by the life insurance companies.

Only 47.71% of total respondents are aware about all the life insurance policies and 52.29%
people are not aware about all the life insurance policies offered by the life insurance
companies.

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It was found that 29.3% people prefer short term investment policy, 36.7% people prefer
long term investment policy and 25.3% people prefer both long and short term policies of life
insurance while 8.7% people are notapplicable.

The scheme mostly preferred by the insurance holders was protection schemes like whole
life, money back policy, endowment plus and pension funds insurancepolicy.

According to survey safety the most important criteria which is expected among all the
respondents towards their investment alternatives followed by Great Return, Tax Benefits,
Future security and Financial Safety.

According to the study company image is to be the highly important criteria which we
consider before taking up a life insurance this is mainly because people expect safety and
security for their money which they invest, followed by the factor premium which we pay to
the insurer and then bonus and interest paid by the company, services etc.

People who belong to different age groups have different perception regarding the most
important criteria before taking a decision on life insurance policy.

People who belong to different income groups also have different perception regarding
investment in life insurance policies.

Limitations of study

 This study has been conducted purely to understand investor’s perception investment
towards life insurancepolicies.

 This study is only limited to Indian insurancecompanies.

 Some of the respondents of the survey were unwilling to shareinformation.
 The information given by the respondents might be biased because some of them
might not be interested in providing correctinformation.

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References

 https://ijcrt.org/papers/IJCRT2102377
 https://apps.aima.in/ejournal_new/articles
 https://www.slideshare.net/raningfire
 https://www.researchgate.net/publication/319652306
 http://www.iosrjournals.org/iosr-jbm/papers
 http://indianresearchjournals.com

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