1.

Problem Statement
Life is something that has been given to us that we need to appreciate it. As human

being there is full of risks and uncertainties since, we are social human beings, we have our
own responsibilities too to minimize these risks. We cannot prevent an unpredicted event that
will give some uncomfortable condition but there is certain way to safe our treasured ones
from the losses occurs due to deficiency of lives. Life insurance is not only gives assurance
for the monetary losses but it provides the new market and avenues to the society (Sharma,
n.d.).
Family is one of the major factors that will lead to the family to have insurance life
policy. According to Garman and Forgue, when the head of family is dead the family
members are automatically will have financial problem in surviving. This is because the
whole time is only the head of family that earn financial obligations, such as dependants to
support, children to educate, and a mortgage to repay. Life insurance allows individuals and
families to share the risk of premature death of the primary wage earn. From this we can
conclude that, the main reason for the purchase of life insurance policy is to provide financial
security for the family (Shakti, 2012).
Every individual will have different reason to have life insurance policy where people
will buy life insurance as a medium to long-term tax favored savings and investment of
vehicle. Life insurance is fast emerging as an important mechanism to finance the needs of
the people. The need of insurance policy we can see when there is sudden ill from individual
around us or our own self. When the individual is hospitalization and need surgery to precede
life insurance policy will help in covering the cost of hospitalization (Shakti, 2012).
In this global now where world with technology, we could see a lot of gadget like
smart phone and etc. Now with improved literacy, modest rise in incomes, and fast spread of

print and electronic media, there is greater awareness and increasing demand for better
services of insurance. There is growing evidence that the level of insurance spending in India
currently at over 7 per cent of its total GDP and this is considerably higher than that in many
other developing countries. This evidence also suggests that more than three-quarters of this
spending includes private out-of-pocket expenses (Shakti, 2012). According to Roy and
Vishal, there is a vast untapped insurance market in India. According to World Insurance
Report, India accounts for 16% of the world population, but accounts for only 1.68% of the
world life insurance market in 2006. India is also far behind world averages in terms of
insurance penetration, and insurance density (Shakti, 2012).
Malaysia is one of the countries that developing in insurance policy market, many
organizations have established life insurance policy. Example of organization that provide
insurance is Prudential Assurance Malaysia Bhd, Takaful, and Allianz Life Insurance
Malaysia Bhd. The establishment of first takaful operator took place is in year 1985. As in
usual life insurance, growing rate of market penetration is an essential part as the significance
of takaful which defined as the ratio of the number of certificates in force to total population.
In the Malaysian takaful industry, the penetration rate increases from 5.62 percent in 2005 to
6.45 percent in 2006 ( Redzuan et al. , 2009). ASNB have done a program Seminar 360
which this seminar are encourage every level of society invest in variety of their product
including life insurance protection. One of the level of their partipants is students.
Leading to the above matter, this research is carried out to investigate awareness of
student of UiTM Seremban 3 in the life insurance policy and identify the factor that influence
student for having life insurance policy.

1.3

Question of research
1) What is the level on the awareness of importance in having life insurance policy
among FSPPP student of Seremban 3 ?
2) Is there any relationship between family background and student awareness towards
importance of having life insurance policy?
3) Is there any relationship between knowledge and student awareness towards
importance of having life insurance policy?

1.4

Objective of the Study

1) To examine the level on the awareness of importance in having life insurance policy
among FSPPP student of Seremban 3
2) To identify the relationship between family background and student awareness
towards importance of having life insurance policy
3) To investigate the relationship between knowledge and student awareness towards
importance of having life insurance policy

1.5

The Scope of Study

The scope is study is something that show the limitation of the research done by a

researcher. From this scope of study will tell (Leake, n.d). This research will focus on
awareness towards importance of life insurance policy among student from one faculty oly
which is FSPPP. The totl of repondents that will involve in this tuy is 200 respondents. The
territory is located at UiTM Seremban 3, Negeri Sembilan. The research will be conducted
within 2 semester from September 2014 to June 2015.
1.7

Definition of Term and Concept

Insurance is a contract by which one party undertakes to indemnify another against

loss, damage or liability arising from an unknown or contingent event. According to the
Advanced Learners Dictionary Hornby (2005) Insurance refers to agreement by contract to
pay money especially in case of a misfortune such as illness, death or accident such as life or
car insurance (Ajani, 2013).
Insurance is considered as one of the oldest and well known financial products but
there are still many who shy away from it and would not purchase it at free will. Perhaps this
is because insurance is quite a complex product and in the Asian society, some find it a taboo
to talk about unfortunate circumstances such as death, disability or ill health. However, given
life uncertainties, insurance helps to cushion and minimize the loss that consumers and
households incur in the event of unfortunate incidents (Yiing, Yi, 2012).
Life Insurance is a cooperative device which spreads risk of a person over a large
number of people against different types of contingencies such as death of a person due to
accident or sickness etc. It is an arrangement where losses of a few are extended over several
who are exposed to similar risks (Banne, Bhola, 2014).
There are three main types of life insurance policies in actuarial literature (Back,
2000). The first one is whole life insurance which provides a death benefit for lifetime.
Second is term life insurance which provide a death benefit for a limited number of years and
environment life insurance, which is a term life insurance with a saving component (Okunnu,
Adeyemi, 2008). The insurance sector in Malaysia has shown rapid growth in recent years.
However, on comparing with other Asian countries, the penetration rate of life insurance
remains low and there is still a large untapped life insurance market in Malaysia (Yiing, Yi,
2012).