CHAPTER 1

INTRODUCTION

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 1. Introduction
Human life is a most important asset and life insurance is the way which provides financial
protection to a person and his family members at the time of any disaster. Life insurance
provides both protection as well as safety to everyone and also give benefit as a tax saving
tool.

Insurance companies plays a vital role in the welfare of human well-being by providing
safety and protection to thousands of people against life risks such as uncertain accident or
death.

Indian consumers influenced by both emotional as well as rational factor, they believe in
secure future for their family. Life insurance covers both components risks coverage as well
as savings. Now-a-days Insurance has becoming as the best option for saving and risk
coverage. But in India insurance is frequently well thought-out as a tax saving tool instead of
its additional implied long term financial benefit.

1.1. Consumer
A consumer is an individual who buys and consumer goods and services for satisfying his/her
needs and wants.
A consumer is an end user, and not necessarily a purchaser, in the distribution chain of a
good or service.
A consumer is the one who pays something to consume goods and services produced.
As such, consumers play a vital role in the economic system of a nation. Without
Consumer demand, producers would lack one of the key motivations to produce: to sell to
consumers. The consumer also forms part of the chain of distribution.
A consumer is a one that consumes, especially one that acquires goods or services for direct
use or ownership rather than for resale or use in production and manufacturing.
A consumer is an end user of goods and services; a consumer may or may not be the purchase
of the goods.

1.2 Consumer Behavior

“It is the sum total of a consumer's attitudes, preferences, intentions, and decisions regarding
the consumer's behavior in the marketplace when purchasing a product or service. The study
of consumer behavior draws upon social science disciplines of anthropology, psychology,
sociology, and economics.” (Grimsley)

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“Consumer behavior is the study of how people buy, what they buy, when they buy and why
they buy” (Kotler, 1994)
Consumer is the study “of the processes involved when individuals or groups select,
purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and
desires” (Solomon et al., 1995)
“The behavior that consumers display in searching for, purchasing, using, evaluating, and
disposing of products and services that they expect will satisfy their needs”
( Schiffman , 2007)
The study of consumer behavior explains as to:
 Why and why not a consumer buys a product?
 When a consumer buys a product?
 How a consumer buys a product?
In a layman’s language consumer behavior deals with the buying behavior of individuals.

1.3 Consumer Buying Behavior

Consumer buying behavior is considered to be an devoted part of marketing and Kotler and
Keller (2011) state that consumer “buying behavior is the study of the ways of buying and
disposing of goods, services, ideas or experiences by the individuals, groups and
organizations in order to satisfy their needs and wants.”
Buyer behavior has been defined as “a process, which through inputs and their use though
process and actions leads to satisfaction of needs and wants” (Enis, 1974,
p.228). Consumer buying behavior has numerous factors as a part of it which are believed to
have some level of effect on the purchasing decisions of the customers.
Alternatively, consumer buying behavior “refers to the buying behavior of final consumers,
both individuals and households, who buy goods and services for personal consumption”
(Kumar, 2010, p.218).
From marketers’ point of view issues specific aspects of consumer behavior that need to be
studied include the reasons behind consumers making purchases, specific factors influencing
the patterns of consumer purchases, analysis of changing factors within the society and
others.

1.3.1. Factors affecting consumer behavior:

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 Purchasing Power: Purchasing power of a consumer plays an imperative role in
swaying the consumer behavior. The consumers generally analyze their purchasing
capacity before making a decision to buy and products or services. The product may
be outstanding, but if it fails to meet the buyers purchasing ability, it will have high
impact on it its sales. Segmenting consumers based on their purchasing and buying
capacity would help in determining eligible consumers to achieve better results.

 Group Influence: Group influence is also seen to affect the decisions made by a
consumer. The primary influential group consisting of classmates, family group and
colleague, immediate relatives and the secondary influential group consisting of
neighbors and acquaintances are seen have greater influence on the buying decisions
of a consumer. Buying behavior of individual have directly effect on groups.

 Personal Preferences: At the personal level, consumer behavior is influenced by

various shades of likes, dislikes, morals and values. In certain dynamic industries such
as food, fashion and personal care, the personal view and opinion of the consumer
relating to style and fun can become the dominant influencing factor. Though
advertisement and social media, it can help in influencing these factors to some
extent, the personal consumer likes and dislikes employ greater effect on the end
purchase made by a consumer.

 Economic Conditions: Consumer spending decisions are known to be greatly

influenced by the economic situation in the market. This holds true especially for
buying of vehicles, houses and other household appliances. A positive economic
environment is known to make consumers more confident and willing to indulge in
purchases irrespective of their personal financial liabilities.

 Marketing Campaigns: Advertisement plays a greater and important role in

influencing the buying decisions made by consumers. They are even known to bring
about a great shift in market shares of by influencing the buying decisions of
consumers. The Marketing campaigns done on regular basis can impact the consumer
buying decision to such an extent that they may opt for one brand over another.

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Marketing campaigns if undertaken at regular intervals even help to remind
consumers to shop for not so exciting products such as health products or insurance
policies.

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 CHAPTER 2
LIFE INSURANCE

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2) Life insurance
Life is full of uncertainties and risk, we as a social being we have responsibilities too. Indian
consumers have high impact of emotions and rationality on their purchasing decisions. They
are much more future oriented rather than present and also having desire to have better and
safe future, in this way life insurance services having their value in minimizing risk and
uncertainties. Indian economy is developing and having middles class societal status and
salaried persons. Their money value changing between current needs and future desire, which
generates the reason behind holding a policy. Here in this research paper, attempt has been
made to study the buying behavior of consumer towards life insurance policy in Udaipur
region.

2.1 History of life insurance in India-

The life insurance started in India in1818 with the Oriental Life insurance company in
Calcutta. This company failed in 1834. In 1829, the Madras Equitable began transacting this
business in the Madras presidency. The concept of Insurance in India has evolved from others
countries such as England particularly. 1870 saw the portrayal of the British Insurance Act
and in the last three decades of the nineteenth century, the Bombay Mutual (1871), Oriental
(1874) and Empire of India (1897) were started in the Bombay Residency. This era was
dominated by foreign insurance offices which did good growth in India, like Albert Life
Assurance,Liverpool and London Globe Insurance and the Indian companies were having
hard competition from the foreign companies.

In 1912 the Life Insurance Act were passed. Life Insurance Act was the first regulatory
authority in life insurance industry in India. In the year 1928, the Indian Insurance Companies
Act passed. The main goal of this act was to keep control over the insurance industry and to
stop failures of unsound schemes. In the year 1944, a bill was presented in legislative
assembly of India to nationalize the whole Indian insurance industry.

On 1st September 1956 the Life Insurance Corporation of India came into action. Life
Insurance Corporation of India was created by nationalizing 245 private life insurance players
and other entities which were involved in life insurance business. As a result of Industrial
Policy Resolution of 1956, the whole insurance industry was nationalized in India. The life
insurance industry become stable and started growing rapidly after nationalization.

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Life Insurance Corporation of India started working with 5 zonal offices, 212 branch offices
and 33 divisional offices in India. Life Insurance Corporation was the only life insurance
player in India before the entry of various private life insurance companies. Life Insurance
Corporation of India has enjoyed monopoly in the life insurance industry for a long time.

In the year 2000, the Indian insurance industry was opened for private insurance companies.
Foreign companies were allowed ownership of up to 26%. The Authority has the power to
frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000 onwards
framed various regulations ranging from registration of companies for carrying on insurance
business to protection of policyholders’ interests.

2.2 Need for life Insurance:

1. LOOKING AFTER YOUR FAMILY EVEN AFTER YOU'RE GONE: This is the
most vital aspect of life insurance that one needs. Your family is reliant on on you even after
you're gone and you certainly don't want to let them unhappy. Whether it's for replacing lost
income, paying for your child's education or making sure your partner get the much-needed
financial safety, life insurance could save the day for your living dependents.

2. DEALING WITH DUES: You don't want your loved ones to deal with financial
responsibilities during a disaster. Any outstanding debt-a home loan, personal loan, or a loan
on credit cards-will be taken care of if you happen to buy the right life insurance.

3. HELPS ACHIEVE LONG-TERM TARGET: Insurance policy helps to achieve long

terms goal, it helps to achieve house, car or any needy items for your family. Before opting
for an investment-linked policy, be sure for reading all the terms and conditions of the policy.

4. LIFE INSURANCE ADD-ONS RETIREMENT GOALS: Every person need retirement

saving to the last until he/she lives. With the help of insurance plan, you can have regular
income in every month. Putting money in a life insurance product and enjoy a stable income
every month even after retirement.

5. Purchasing Protection Strategy is less expensive when you are more youthful: Few out
of every odd visionary needs an extra security arrangement. Be that as it may, on the off
chance that you do have wards or you have co-marked an advance with your societies,
regardless of whether it be an substitute credit or a home advance, you have to begin
considering buying a life insurance strategy. Protection experts may attempt to offer you a
strategy that you won't not require.

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In this way, do your due seriousness or approach a monetary organizer to decide how much
protection you require considering alternate resources you may claim. Regardless of whether
you're single, there might be different wards and you have to guarantee they're dealt with.
Pradeep Pandey, head promoting officer, Future General Disaster protection, says, "The prior
the better. For example, single individuals give money related help to maturing guardians or a
kin with unique needs. Insurability is another motivation to consider disaster protection when
you're single. In case you're youthful, sound and have a decent family wellbeing history, your
insurability is at its pinnacle, and you can get the best rates on your life coverage approach."

6. Your business Additionally Dealt with: Life coverage isn't just for yourself and your
family. Some protection arrangements additionally deal with your business. On the off
chance that you claim a business, at that point your business accomplice can buy your part of
the business without issue. Your business accomplice will enter a purchase offer
understanding and the payout would go to the perished accomplice's chosen people, however
without giving them a stake in the organization. There are two kinds of life coverage
arrangements a term protection approach and a life coverage strategy. .

A term protection gives assurance to a predefined timeframe (10, 20 or 30 years). The

strategy will lapse and scope will end on the off chance that you outlast your arrangement. A
assumption cum-security anticipate the other hand offers you a single amount sum on the
finishing of the term of the approach. These designs additionally offer you insurance however
the cover is typically not as high as offered with term designs.

7. Duty Sparing PURPOSES: You could spare duties with protection arrangements
independent of what design you purchase. The superior you pay on a protection arrangement
is qualified for a most extreme tax reduction of Rs 1.5 lakh under Area 80C, and for tax-
exempt continues on death/development under Segment 10 (D) of the Wage Assessment Act,
1961.

8. Peace of mind: Passing is unavoidable. Even with catastrophe, the slightest you can
improve the situation your family is to secure their money related future. Regardless of
whether it is a little approach, you realize that you've done everything you can to enable them
to hold over worrying conditions.

9) In order to meet Family's Financial Requirements-In case you are the only person in
your family who is an earning member, then the family's income will cease when you are no
more. If any miss happening occurs, then with no stable source of income, the standard of

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living of family members will fall and they may not be able to meet even basic needs like
education. Therefore, your life insurance policy will help your family during such times.

10) For Loans and Expenses Repayment- You may have taken a loan or you may have
borrowed money from a friend for starting a business. Also, you might have several other
family responsibilities. In all these cases it is your spouse or children who will have to bear
the heavy burden of paying off the loan in your absence.

11) Diverse Investment Options-You can also use your life insurance Policy as a good
investment tool. There are various kinds of insurance policies in which you can park your
surplus funds and can earn return either in lump sum or at regular intervals of time. For
example, retirement plans, child insurance plans, whole life insurance plans, Term life
insurance plans etc. are all good life insurance policies.

12) Illnesses and Accidents- Life insurance policies are always a very good protection
option as well against the financial pressure that you might face during a serious illness or
accident. It helps you to get treatment from the best hospitals without worrying about the
financial burden. Usually all insurance policies should be purchased when you are young and
free of illnesses.

13) For Tax Benefits- Life insurance policies are an excellent instrument of saving tax too.
Under Section 80C of the IT Act, many of the insurance schemes in India including the life
insurance schemes offer tax deductions on Premium payments.

14) Draw Loans against Insurance - Besides using your life insurance Policy amount to
repay your loans and expenses you can also use your Policy to draw a loan against it. It could
be used as a security in the banks or financial institution while taking loans.

 Retirement plan
 Term insurance plan
 Group plans

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2.3 BASIC POLICY OF LIFE INSURANCE:

1) Endowment policies:
This type of policy covers risk for a specified period and at the end of the adulthood
sum assured is paid back to policy holder with the bonuses during the term of the
policy.

2) Money back policies:

This type of policy is for periodic payments of partial survival benefits during the
term of the policy as long as the policy holder is alive.

3) Group insurance:
This type of insurance offers life insurance protection under group policies to various groups
such as employers employees, professionals, co-operatives etc it also provides insurance
coverage for people in certain approved occupations at the lowest possible premium cost.

4) Term life insurance policies:

This type of insurance covers risk only during the selected term period. If the policy holder
survives the term, risk cover comes to an end. These types of policies are for those people
who are unable to pay larger premium required for endowment and whole life policies. No
surrender, loan or paid up values are in such policies.

5) Whole life insurance policies:

This type of policy runs as long as the policyholder is alive and is covered for the entire
life of the policyholder. In this policy the insured amount and the bonus is payable only to
nominee on the death of policy holder.

6) Joint life insurance policies:

These policies are similar to endowment policies in maturity benefits and risk cover, but joint
life policies cover two lives simultaneously such as married couples. Sum assured is payable
on the first death and again on the death of survival during the term of the policy.

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 7) Pension plan:
a pension plan or annuity is an investment over a certain number of years but does not
provide any life insurance cover. It offers a guaranteed income either for a life or certain
period.

8) Unit linked insurance plan:

ULIP is a kind of insurance plan which provides life cover as well as return on premium paid
over a certain period of time. The investment is denoted as units and represented by the value
called as net asset value (NAV).

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 CHAPTER 3
REVIEW OF LITERATURE

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 REVIEW OF LITERATURE

(cammack, 1976) concurs that insurance is generally thought of as an item that spreads the
danger of genuine, however low-likelihood, losses among a group of people thus giving some
money-related security to every person.

(Kunreuther, 1979)"It isn't the size of a potential loss that motivates individuals to purchase
insurance voluntarily – it is the frequency with which a loss is likely to happen" He said that
his item gives logic, especially when the security is obtained against potential losses, for
example, full demolition of one's home, demise of essential family provider or a large
accident liability judgment. In any case, it has already been perceived that this sensible item
is hard to offer.

Roger. A. Formisano (1981) inspected, by means of consumer meets, the effect of the
National Relationship of Protection Chief's Model Extra security Sales Direction as executed
in New Jersey. A considerable part of the insurance buyers tested did not wind up mindful of
the arrangements of the control planned to enhance their purchasing capacity. In addition,
many life insurance buyers were not well informed about life and life insurance contracts,
and in particular about life insurance policies they had purchased.

Michael L. Smith (1982) said that a typical life insurance contract provides a package of
options or rights for the policy owner that is not exactly duplicated by any other combination
of commonly available contracts. Seen from this perspective, life insurance enjoys a unique
position in the investment field and should be judged in this way. The paper shows that a
view of the options provides a more complete explanation of the policyholder's behavior
towards life insurance than the conventional view of savings and protection.

(mills, 2000)Studied It is rarely thought that the insurance industry is very worried about
energy problems. However, the historic participation of insurers and industries related to the
development and dissemination of family technologies such as airbags for cars, fire
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prevention / extinguishing systems, anti-theft devices, shows that this industry has a long
history of using technology to improve safety and reduce the likelihood of losses for which
they would otherwise have to pay. We have identified almost 80 examples of renewable
energy and efficient energy technologies that offer "loss prevention" advantages and we have
assigned these opportunities to the appropriate segments of the highly diversified insurance
sector (life, health, property, responsibility, business interruption). , etc.).

(Antony Beckett, paul hewer and barry howcraft, 2000) found that this new innovation
has created exceptionally aggressive economic situations that have an immense effect on the
conduct of the buyer in the monetary administrations. Scientists have focused on the fact that
specialized cooperatives must understand customer buying behavior. A model was proposed
to understand the idea of the buyer's behavior towards monetary elements.

(babri and Alinvi F, 2007)The study was conducted specifically in young consumers
between the ages of 18 and 27. In their article, they tried to find the answer to the question
about how the insurance company could improve its ability to constantly change customer
preferences in an increasingly competitive environment. In this theory, they discovered that
income flow, age, family size were important determinants, information about products and
services also influenced consumer preferences, product and service options, ie customer
choice and time plays an important role. Through this study, it was concluded that price is a
decisive factor for young customers of insurance services. We also conclude that there is a
lack of awareness among young people about the services provided by insurance companies,
as well as the fear of being deceived or deceived by telephone vendors representing insurance
companies. Therefore, they require more information. While the Internet is the main source
of knowledge, you also prefer personal contacts when you make the decision. However, it
was concluded that the majority of respondents showed a tendency to change their
preferences during their useful life, as the circumstances of their lives would change.

(ahmed.et al, 2007)The secondary study was conducted on the basis of the SERVQUAL
MODEL in Bangladesh and found that people tend to invest more in private insurance
companies because of better quality of services. Among private and local insurance customers,
they prefer foreign private insurance companies thanks to their operational experience and the
coverage of large areas. Companies must invest in building their reputation to reduce the flow

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of customers. They also found that 25% of respondents chose their insurance company with
influence from sales staff.

(sahu et al., 2009);conducted a survey of 150 people to determine the attributes that influence
consumer buying behavior, the investment model in life insurance services and compare
differences in consumer perceptions between male and female consumers. In their study, they
found that there are 6 factors that influence buying behavior when buying life insurance
policies, namely consumer loyalty, quality of service, ease of procedures, level of satisfaction,
company image and relationship with the client of the company. There is no difference between
the perception of male and female preferences.

(Kaur and Negi, 2010); They conducted their study in Chandigarh and through factorial
analysis they found a personalized and timely service, USP brand, considered employee, price
immunity as the main factors influencing customer satisfaction. They also found that the
maximum life covered by insurance is for men and women and the level of satisfaction between
insurance companies in the public and private sectors is the same.

M.Epctimchin (2011); He conducted a survey in Nigeria to find out about the factors that
improve the purchase of life insurance and found that the company's loyalty is the main factor
influencing the purchase decision and the company's customer relationship as the last one.
These factors are beneficial for the company and for the consumer.

(Sadhu and Bala, 2011);the sample was taken from 450 respondents from different
workplaces in 3 cities, Jalandhar, Ludhiana and Amritsar, but of the 450 samples, 337
respondents completed the questionnaire in all aspects. They conducted a study in three cities
in Punjab to learn about the factors influencing the quality of the SIC service. They used the
technique of factorial analysis and, consequently, they found 7 factors composed of expertise,
means and presentations, physical excellence and ethics, service delivery process and purpose,
security and dynamic functioning, credibility and functionality. Along with these factors,
managerial involvement, such as agent performance, also affects customer satisfaction.

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(Chaudhary, 2012)explained that today India is one of the fastest growing economies in the
world. The insurance sector contributes to the financial sector of an economy and also
provides social security for the population of a country. Income capacity and increasing
literacy rates are the key factors in the growth of the insurance industry. This sector offers
security and long-term contractual savings. Investors in life insurance seek a good coverage
of life and risks of repayment. This study is carried out in the city of Panipat to verify the
level of awareness and satisfaction of insurance buyers / consumers. To achieve these goals, a
questionnaire is designed to collect data from insurance buyers.

Choudhuri (2014) explained that, as a social being, clients are not only related to different
types of people in their daily lives, but are also directly related to their service providers in
different ways. Empirical studies indicate that in the modern era of society, customer
awareness about the various life insurance products that exist depends on a number of factors
in which these factors vary depending on the situation, culture, country and society sector. as
a wise person in the industry Taking into account the scenario of awareness of the customers
of the Life Insurance Corporation of India (LICI) on their products available in the current
market of life insurance, the researcher in this study conducted a study in Burdwan district,
West Bengal, to identify the significant factors that play a role of customers "is to raise
awareness on the different products of LICI.

(Yadav and tiwari, 2012)The area of study is limited to the district of Jabalpur, in Madhya
Pradesh, and a sample of 150 insured persons is taken and the sample has been selected through
a stratified and intentional sampling method. The study was conducted to learn about the
factors influencing the client's investment decision, the impact of various demographic factors,
the preferences of customers in making the decision and the classification of factors responsible
for selection life insurance as an option investment. The study was conducted on 150
respondents. In his study on the factors influencing the investment of customers in life
insurance policies and found that age, gender, income level. Of the 150 samples, 54.6% of
policyholders invested in LIC, followed by SBI life insurance between private operators. The
characteristics that policyholders take into account when making a purchase can be classified
as follows: company reputation, guarantee of reimbursement, risk coverage, low premium and
easy access to agents such as 1st, 2nd, 3rd, 4th and 5th respectively. Therefore, it can be
concluded that the goodwill of the company is the factor that most influences the decision to

17
purchase the policies. It was found that the majority of respondents preferred reimbursement
policy. When studying the reason to purchase the insurance policy, the majority (54.6%) of the
respondents opted for the LIC policies because of security and the rest of the respondents opted
for private players to get more profits. The area of study is limited to the district of Jabalpur,
in Madhya Pradesh, and the sample size is 150 LIC insured and several private life insurers
have been selected through a stratified and intentional sampling method and in their article has
highlighted the role of Insurance Regulatory and Development Authority of India for life in
insurance industry and has concluded that community, cultural, dogmatic, personal, emotional
and demographic factors impact the consumer behavior. This reading discloses that the
demographical aspect has the major effect on the buying decision of consumer. The leadership
does not propaganda in getting the maximum number of policies sold but in understanding the
buying behavior of the customer and pointing them in their way. Finally, they considered the
achievement of insurance marketing dependent on understanding the cultural and social needs
of the target audience.

(Manuel, 2013) he conducted the study to find out the Consumer Perception regarding life
insurance policies in Kottayam City. He used exploratory research design. This was restricted
to the people of Kottayam city. The sample which was taken of different age group of 50
respondents. The study was conducted to find out the qualities which affect decision making
of consumers of life insurance policies which are reappearance on investment, company
reputation, premium outflow, service quality and product quality. The majority of respondents
belong to age group of 19-28 years, dominant salary group was 5001- 10000 and LIC had the
major consumer in the market.

(Mahajan, 2013)conducted a study on consumer decision making process in life insurance

services and she found that there are five stages of buying life insurance i.e. need recognition,
search of alternative, evaluation of alternative, purchase decision and post purchase evaluation.
Special concerns relating to insurance industry are perceived risk, risk and standardization and
risk and information. She even formulated certain stages to improvement of customer
awareness about profits of life insurance products like focusing on marketing techniques. Thus
she concluded that the consumer's buying behavior towards Life Insurance Policies is positive.
There is still a positive mind sets should be developed for their investment pattern, in insurance
policies. Still some actions need to be improve in insurance sector.

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(Vibhute and Shamrao, 2013) conducted a survey in Kohlapur on 127 respondents to find out
the preference of customers towards insurance policy, the satisfaction level towards Unit linked
insurance plan (ULIP) plans and traditional plans and the factors influencing the investment
decision. It was found that LIC is the major insurance player and traditional plans being more
preferred than Unit linked insurance plan (ULIP) plans. Majority of respondents think
insurance to be safety option followed by pension scheme and tax savings. Majority of holders
take policies from financial consulter and banks. Investor view of investment also depend upon
service quality, status, trust value and future plans of company.

Venkaiah and Sudhir (2013); conducted a study to find out the performance of private
insurance players and they have been taken sample of 200 respondents. They found that very
few feel private companies to be better than LIC. The services given by private companies are
as per prospect of customer and they feel no risk in financing in private companies.
Respondents want more policies with tax benefits among private companies.

(Singh et al., 2014) conducted a survey in Delhi NCR region to discover out service quality of
life insurance companies and effect of demographic factors on consumer perception, they
conducted the survey on 139 respondents and they found factors like assurance factor,
convenience factor, tangible factor and empathy factors. They found that only age of
respondent has major impact on buying of insurance product. Whereas various demographic
factors such as gender, education, and annual income did not have significant impact on choice
of insurance product.

(S. Narender and L. Sampath, 2014) said that although the insurance sector is old, awareness
of rules, regulations and rights is insignificant. Through the empirical study conducted among
the respondents, it was concluded that the main financial need for the client in the near future
will be the education of the children and the expenses of the marriage.

Harinam Singh (2014) attempted to identify the general description of customers in various
life insurance companies in Uttar Pradesh. The authors revealed that insurance is the pillar of
any market economy that aims to group large FPR financial sources for long periods of time.
The study suggested that insurance companies should provide customized solutions for
customers in a personalized way, understanding the needs of customers.

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(Dipin Madhr and Ashish Tripathi, 2014) studied 29 literature factors that influence the
choice of the client in the choice of an insurance company among 120 samples in the city of
Ajmer. From the study, the researchers found that there are 9 key factors among the 29 that
contain variable clubbing that greatly influence the choice of customers in the choice of
insurance companies.

Singh (2014); conducted a sample survey of 255 respondents from Uttar Pradesh to analyze
consumer behavior of life insurance. The main purpose for which the study was conducted was
to assess the socio-economic status of respondents and examine the impact of the state on the
ability to purchase insurance. The study shows that the maximum amount of people invests for
tax benefits and family security. He discovered that the main insurance products are the
children's plan and the pension plan. He also found that at most people like to obtain insurance
products directly from insurance agents followed by banks, financial institutions and
intermediaries. It was discovered that governmental servicemen aged between 26 and 45 buy
more insurance products and the middle income group from 100,000 to 300,000 people buy
more insurance policies.

Kumar (2014); the survey was conducted by him only in 200 interviewees in Dehradun. In his
survey, he found out that the maximum investors are young and that there is a gender bias in
the investment model. Married people and people living in urban areas invest more in LIC. He
also found that the maximum number of people opted for annual payment plans. Most owners
belong to the service sector and middle class people. Maximum number of people invested in
LIC based on their brand and invest more in return policies.

(Rajvardhan and jahangir, 2014)the sample was taken from the district of Nalgonda with
120 respondents. In his article, a survey was conducted on the rural market of Telangana to
learn about socio-demographic and economic variables that have an impact on the consumer's
perception decision. They found that gender and marital status have a very low impact on
perception. While education and income level have a significant impact. The middle income
group is more involved in the insurance sector. Likewise, an employment also has a significant
impact on insurance. Furthermore, insurance is considered a tax saving and not an investment
opportunity.

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(Sandeep Chaudary, 2016) has extracted six factors that influence consumer behavior:
personalized and timely services, better company reputation, customer convenience, better
quality of service, tangible benefits and effective management of customer relationships. This
study revealed that new and innovative products will improve the best management of customer
relationships based on the sample study of 100 respondents.

(M. Vijaya raghu, 2016) in his study of consumer behavior towards life insurance companies
with reference to two private insurance companies, revealed that consumer behavior and
customer purchase attempts depend on factors such as research, experience and credibility. The
study concluded that customers will favor wealth insurance plans.

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 CHAPTER 4
RESEARCH METHODOLGY

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4.1 RESEARCH

Research is the process of systematic and in-depth study or search for any particular topic,
subject or area of investigation, backed by data collection. Complication, presentation and
interpretation of relevant details or data .It is a careful search or inquiry into any subject
matter, which is an endeavour to discover or find out valuable facts that would be useful for
further application or utilization.
Research methodology is the systematic problem analysis, model building and fact finding
for the purpose of improved decision making. It is the collection summary and analysis of
data regarding goods and services it helps in deciding the nature and tend demand.
Research may involve a scientific study or experimentation and result in discovery or
invention, which would aid either scientific development or decision making.
This chapter provides a discussion on the outline of the research methodology that was used
in this study. It focuses on the research objectives, research design, sampling design data
collection methods, research instruments that were used.

4.2 OBJECTIVES OF RESEARCH

 To gain the familiarity with the phenomenon or to achieve new insights.

 To portray accurately the characteristics of a particular individual, situation or a
group (studies with the object in view are known as descriptive studies)
 To determine the frequency with which something occurs or with which it is
associated with something else (studies with the object in view are termed as
exploratory research studies).
 To test hypothesis of causal relationship between variables (such studies are known as
hypothesis-testing research studies)

4.3 RESEARCH DESIGN

23
The research design refers to the overall strategy that you choose to integrate the different
components of the study in a coherent and logical way, thereby, ensuring you will effectively
address the research problem; it constitutes the blueprint for the collection, measurement, and
analysis of data.
For the purpose of conducting the study exploratory and descriptive research design is
adopted to make the study meaningful. Exploratory Research is research conducted to study
the problem more clearly, to establish priorities, develop operational definitions and improve
the final research design. Exploratory research helps determine the best research design, data
collection method and selection of subjects. While descriptive research is used to describe
characteristics of a population being studied. A descriptive survey enabled to describe the
characteristics of the variables of interest.

4.4 DATA COLLECTION

The data collection tools used for the study were both primary and secondary data.

4.4.1 Primary Data: Data used in research originally obtained through the direct efforts of
the researcher through surveys, interviews and direct observation. Primary data is more costly
to obtain than secondary data, which is obtained through published sources, but it is also
more current and more relevant to the research project.
The primary data was collected through questionnaire method

4.4.2 Secondary Data: Secondary data is the data that have been already collected by and
readily available from other sources. Such data are cheaper and more quickly obtainable than
the primary data and also may be available when primary data cannot be obtained at all.
The sources of secondary data are newspapers, journals, published articles, and websites.

4.5 RESEARCH METHODOLOGY

The Study: The present study is an exploratory and descriptive type of research study. The
study aims to find out the factors influencing customer life insurance investment decision and
their preferences at the time of policy buying decision.

Population:

24
Population included investors in Udaipur region.

Sample frame:

Since the data was collected through personal contacts, the sample frames were the
individuals who are investing in life insurance policies.

Sampling elements:

Individual respondents were the sampling elements.

Sampling Techniques:

Purposive sampling technique was used to select the samples.

Sample Size:

100 respondents have been taken from Udaipur region.

25
 CHAPTER 4
DATA ANALYSIS AND
INTERPRETATIONS

26
 a) Gender of the respondent?

Gender

41% Female

59% Male

Male Female

Chart 1

From the above survey it can be noticed that there were almost equal number of male and
female respondents; male respondents comprising 59% of the total population whereas
female respondents comprising of 41%. Therefore there is no biasness associated with the
gender within the survey.

b) Age of the respondent?

In the survey conducted, there were total 100 respondents. Out of which majority, i.e.,
68% were from the age group 18-25, 19% were from the age group 25-35 and
remaining 8% were from the age group 35-45 and remaining 5% were in the age of 45
and above.

age

5%
8%

19%

68%

18-25 25-35 35-45 45 and above

Chart 2

27
1) Do you have any Insurance Policy?

policy

36%

64%

yes no

Chart 3

INTERPRETATION:
From the above chart it can be noted that 64% having insurance policy and 36% respondent
doesn’t have policy.
It can be concluded that majority respondent were policy holder so by both policy holder and
non-policy holder, we can find out the buying behavior of insurance policy.

28
2) If you don't have any insurance policy, what are the reasons behind
that?

no savings, 26

lack of knowledge, 11

no trust, 7

lack of knowledge no savings no trust

lack of knowledge no savings no trust

Chart 4

INTERPRETATION:

There were 36% respondent didn’t have policy, so it’s necessary to find out the reason for it.
And as per the above chart, 26 respondent (63%) that they don’t have enough saving for
doing life insurance policy and 11 respondent (27%) doesn’t have knowledge regarding life
insurance policy and 7 respondent (17%) have no trust on insurance policy.

29
3) What do you think is the right age to buy insurance?

age of investment in policy

after 20 years
anytime 34%
47%

after 30 years
17%

after 40 years
2%
after 20 years after 30 years after 40 years anytime

Chart 5

INTERPRETATION:

34% of the respondents are with the view that insurance should be bought after the age of 25
years. Whereas, 47% of the respondents are with the view that buying of insurance do not have
anything to do with age i.e. there is no age limitations. It can be purchased any time according
to the need. And 19% of the respondents are with the view that insurance should be bought
after 35 and 45 years of age.

30
4) Which insurance company do you prefer the most?

preference

6%
24%

5%
49%
16%

ICICI PRUDENTIAL HDFC LIFE INSURANCE SBI LIFE INSURANCE LIC ANY OTHER

Chart 6

INTERPRETATION:
Majority of the respondents prefer LIC (49%) over other insurance companies therefore it is
ranked no.1 by that percent of respondents and among the private insurance companies ICICI
Prudential (24%) is more preferable than other companies.

31
5) Do you really think having an Insurance policy is essential in today's
scenario?

not required need of insurance

1%
partially
15%

essential very
28% essential
56%

very essential essential partially not required

Chart 7

INTERPRETATION:
As per the above research, majority of the respondent voted that Insurance policy is very
essential in today’s scenario.

32
6) How did you get to know about insurance policy?

reference

22%

53%

25%

After seeing the ad. in (T.V./paper) approached by an insurance advisor

suggestion by friends/family

Chart 8

INTERPRETATION:
Only 22% of the respondents approached the after seeing the ad. in (T.V/Paper) whereas, 53% of
the respondents were approached by friends and family. And 25% approached by insurance
advisor.

33
7) What do you think are the benefits of insurance policy?

benefits

3%

21%

7%

69%

cover future uncertainity tax deduction future investment any other

Chart 9

INTERPRETATION:
69% of the respondents believe that covering future uncertainty is the biggest benefit of an
insurance policy. 7% of them believe that the other benefits are Tax deduction. Whereas, 21% of
them believe that other benefits are future investment.

34
8) Which feature of your policy attracted you to buy it?

more attractive feature of policy

1%

8%
17%

29%

45%

low premium high risk coverage money back guarantee

reputation of company agent conviction

Chart 10

INTERPRETATION:
45% of the respondents consider high risk coverage feature before buying any insurance
policy as they want to have less risk while investing for their future. 29% of the respondents
wants to have their money back after their policy term is over.

35
9) Are you satisfied with your insurance policy?

satisfaction

20%

80%

yes no

Chart 11

INTERPRETATION:
Majority (80%) of the respondents are satisfied with their existing insurance policy and its
services.

36
10) State your expectations on investment alternatives by ticking
according to its importance

Expectations on investment
80 74
70

60 56
52 50
50 46 46

40 36
33
28
30 23
20 22 20
20 17 15 17 16

10 6 5
2 2 3 3 1 3 2 1 1
0 0
0
safety capital growth liquidity return tax benefit company profit
&brand name
highly important important neutral least important not important

Chart 12

INTERPRETATION:

Respondent are focused upon safety through insurance policy and 74% of them gave highly
importance to the safety while investing in insurance policy.

In the section of capital growth 56% and liquidity (52%) of them (majority) gave important
feature in buying of insurance policy.

Insurance policy should have return and tax benefit according to respondent.

46% of them gave high importance to company profit and brand name while investment in
insurance policy.

37
11) According to you, how much important these parameters are while
buying any insurance policy?

Parameters in buying policy

60
55
52
50
50 47 48
46
44
40 4039 39 40
40
35 34
31 31
30

19 19
20 17
13 12 13 12
9
10

2 2 11 2 11 21 11
00 0 0 0
0
premium charges policy terms rider benefits bonus and pre and post accessiblity company
interest services image

highly important important neutral least important not important

Chart 13

INTERPRETATION:

Respondent gave highly importance to premium, policy terms, bonus & interest & company
image and they gave importance to charges, rider benefits , pre and post services &
accessibility while buying insurance policy.

38
 CHAPTER 5
FINDINGS,
SUGGESTIONS AND
CONCLUSION

39
5.1 FINDINGS

 The study on consumer buying behavior towards life insurance has depicted several
facts.
 It was found that majority of the customers towards life insurance are male in number
when compared with females.
 The age group which prefers to invest more in Insurance are age group of 18-25
years.
 It was found that majority of the respondent having insurance policy that means we
can say that population is aware about insurance policy and benefits.
 The major reasons for not buying of insurance policy is no savings or we can say that
low income.
 It was found that age doesn’t matter to buy insurance policy. Majority of the
respondent have respond for taking insurance policy any time in their life time.
 LIC is the major choice of respondent, therefor it is ranked no. 1 company in buying
preference of policy.
 It was found that according to today’s scenario Life insurance is very essential, it
protect us from future uncertainty.
 It was found that family, friends and self-interest are major drivers in investing in
insurance.
 It was found that insurance policy should cover future uncertainty and it should help
in future investment.
 It was found that insurance policy should be covering high risk coverage. Majority of
the respondents are interested to invest in low risk and safe return policies than high
risk and high return policies
 The study presents an interesting fact that majority of the customers have awareness
on details of the policy they buy, Maximum of them are satisfied with their existing
policy.
 It was found that safety, return and brand name having high importance while
investing in insurance policy.
 It was found that policy terms should be easy as respondent giving high importance to
it.
 The study presents that customers are also taking care of bonus and interest while
investing in insurance policy.

40
 The overall attitude of customers towards life insurance is positive.
 Overall, the study on consumer buying behavior towards insurance policy in Udaipur
city have given us the scope to understand the facts that are influencing a typical
Indian insurance customer to take an Insurance policy.

41
5.2SUGGESTIONS

5.2.1 SUGGESTIONS TO THE INSURANCE COMPANIES

1. To increase the level of insurance penetration Insurance Company may focus on
bringing products that gives safety, return and tax benefit.
2. The insurance company if possible should invest in advertising, conduct road
shows, and spend money on hoardings, so that it can better propagate awareness about
its various lesser known products.
3. The company has the option of tying up with local NGO’s for selling its rural
insurance products.
4. Customer friendly documentationi.e.it should be made easier and faster.
5. All the hidden charges should clearly be stated in the form and explained by the
agent and insurance companies should provide better training to its agents.
6. Claim settlement process should be made fast and must not involve lengthy
decision making process.
7. Some special focus should be laid on individual risk coverage while designing the
products.
8. People becoming more aware and demanding so there is scope for a whole lot of
innovative products.
9. The lack of comprehensive social security system combined with a willingness to
save means that Indian people demand for pension products will be large. Thus, it has
become an opportunity for the life insurance industry.
10. Easy accesses to development in the more advance market provide further
opportunity to upgrade their working. Technological, financial or specific area based
avenues of absorbing improved system are also now more easily available. So, that
insurance companies working efficiently and fast service.
11. The company should introduce more products for the rural masses and the low
income group prospects at minimum affordable prices.
12. There is a welcome shift in the product offering of the life insurance companies.
Traditional products which have a long-term commitment and fetch returns after a long
time have been replaced with short period commitment and guaranteed returns within a
short period of time. However, it is suggested that due care should be exercised by the life
insurance companies to provide products with assured safety of funds as well as returns.

42
 13. It is suggested that the insurance companies should come up with a variety of
children’s policies which would be of use for their future education, marriage and
other requirements. The companies could come out with creative short-term policies
for children that if taken at the time of child’s birth, would yield monetary benefit
every four or five years which would support the child’s education even at the initial
stages.

5.2 SUGGESTIONS TO THE GOVERNMENT AND POLICY MAKERS

1. India lives in the villages. With 70 crores of people living in rural areas, the rural
market has a good potential for life insurance market. However, this market can be
tapped only with the introduction of low premium life insurance products. A
committee may be constituted having the panchayat board members (president and
members), the village administration (village administrate officer, and the office
assistants) and the staff of the primary health centers (doctors, nurses and the
aanganwadi workers) as the members. A life insurance company may join with this
committee and take initiatives to create awareness among the rural masses about the
advantages of purchasing a life insurance policy.

2. Each insurance company must be asked to identify a village with maximum

number of policyholders and adopt it. As an incentive, it may be asked to transform
the village so adopted chosen into a model village consisting of;
Better transportation facilities with frequent bus facilities and well laid road facilities;
water and sanitation facilities by procuring pipeline connection, constructing water
tanks for the benefit of the villagers, taking initiatives for the construction of
government-aided toilet facilities and so on; electricity services may be provided to
each house by obtaining such facilities from the government; mini-libraries may be
opened for the benefit of the villagers; steps may be taken to improve the health care
facilities – medical facilities may be made available for 24 hours to meet the
emergency requirements and organizing self-employment training programs for the
village youth.
3. Children are the wealth of the nation. The life insurance company may take initiatives
to improve the education facilities by providing better infra-structure facilities such as:
Well protected compound facilities, library facilities, class rooms with adequate seating
facilities, water and sanitation facilities – pollution free environment, employing the

43
unemployed youth in the village for conducting coaching classes for the slow learners;
encouraging the students to take part in the sports events at the district, state level,
national, and international level competitions, providing e-learning facilities with
minimum one computer in schools, arrange for the supply of free books, study materials
and stationary articles. This would reduce the number of dropouts from schools.
4. It is suggested that apart from conducting exhibitions, fairs, by banner display and
rallies and by conducting door to door campaigns for motivating the rural people to go in
for such policies that would yield good returns besides providing life cover, the insurance
companies should make use of the Non-Government Organizations, and agents of post
offices and banks. The Public relations officers of the life insurance companies can work
with the village administration and give video presentations.

5. The Government sponsored National Rural Employment Guarantee Scheme

(NREGS) should include a family insurance policy for a minimum period of five
years as part of the employment scheme so that, the workers who have to pay the
minimum premium for one hundred days will be motivated to continue the policy.
This would procure more business for the life insurance companies, as there is a
proposal with the Central Government, to increase the guaranteed working days from
100 to 150.

6. Agents who are not the employees of the company play a vital role in promoting
the sale of life insurance policies. What would be the position of the insurance
companies without these tied agents is a serious question to be thought of by the
insurance companies. In this context, it is advised that Direct marketing technique
which would be much beneficial to the policy holders (agent’s commission is nil) and
the Bancassurance model which would procure the business of the bank customers
could be adopted by the companies.

44
5.3 CONCLUSION

Life insurance is an important form of insurance and essential for every individual. Life
insurance penetration in India is very low as compare to developed nation where almost all
the lives are covered and stage of saturation has been reached. Customers are the real pillar of
the success of life insurance business and thus it’s important for insurers to keep their
policyholders satisfied and retained as long as possible and also get new business out of it by
offering need based innovative products. There are many factors which affect customer’s
investment decision in life insurance and from the study it has been concluded that
demographic factors of the people play a major and pivotal role in deciding the purchase of
life insurance policies.

In present Indian market, the investment habits of Indian consumers are changing very
frequently. The individuals have their own perception towards various types of investment
plans. The study of this research work was focused over consumer’s perception on
investment towards Life Insurance Services. The objectives of the study were to evaluate the
factors underlying consumer perception towards investment in life insurance policies and to
find out the buying behavior towards insurance policy. This research will help to insurance
company to improve themselves in there targeting market and targeting customer.

Insurance industry has to go ahead. A lot of opportunities are still waiting. This research will
help in developing the market share, loyalty and further development in insurance sector.

45
 BIBLIOGRAPHY

 Singh, S. (2015). A Study of Perfumes Buying Behavior of Consumers in India.

 Singh, a., author, c., & dhayal, n. Consumer buying behaviour.
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Sage Publications, New Delhi, India by Palande , P.S, Shah, R.S and Lunawat
 www.irdai.com
 research papers
 international journals
 consumer behavior by Schiffman

46
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48
 Annexure

Questionnaire - A study of consumer buying behavior towards Life

insurance policies in Udaipur.

a) Name
b) Gender
c) Age
o 18-25
o 25-35
o 35-45
o 45 and above

1) Do you have insurance policy?

o Yes
o No

2) If you don't have any insurance policy, what are the reasons
behind that?
 Lack of knowledge
 Not enough saving
 No trust over insurance company

3) What do you think is the right age to buy insurance?

o After 20 years
o After 30 years
o After 40 years
o Anytime

4) Which insurance company you prefer the most?

o ICICI prudential
o HDFC life insurance
49
 o SBI life insurance
o LIC
o Any other

5) Do you really think having an Insurance policy is essential in

today's scenario?
o Very essential
o Essential
o Partially
o Not required

6) How did you get to know about insurance policy?

o After seeing the ad.(TV/print media)
o Approach by insurance advisor
o Suggestion by family or friends

7) What do you think are the benefit of the insurance policy?

o Cover future uncertainty
o Tax deduction
o Future investment
o Any other

8) What feature of policy attracted you to buy it?

o Low premium
o High risk coverage
o Money back guarantee
o Reputation of the company

9) Are you satisfied with your insurance policy?

o Yes
o No

50
51