STUDY OF FACTORS AFEECTING CONSUMERS’

PERCEPTION AND BUYING BEHAVIOUR

WHILE PURCHASING LIFE
INSURANCE POLICIES
A report on

Internship Training

Undergone at

ICICI PRUDENTIAL LIFE INSURANCE Ltd.

PRIORITY CIRCLE

NOIDA SECTOR 18

Submitted in partial fulfillment of the

Requirement for the award of the degree of

POST GRADUATE DIPLOMA IN MANAGEMENT

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 INTRODUCTION

INDUSTRY PROFILE

INSURANCE INDIA

Insurance, in law and economics, is a form of risk management primarily used to hedge
against the risk of a contingent loss. Insurance is defined as the equitable transfer of the
risk of a potential loss, from one entity to another, in exchange for a premium. Insurance
is a federal subject in India and has a history dating back to 1818. Life and general
insurance in India is still a nascent sector with huge potential for various global players
with the life insurance premiums accounting to 2.5% of the country's GDP while general
insurance premiums to 0.65% of India's GDP. The Insurance sector in India has gone
through a number of phases and changes, particularly in the recent years when the Govt.
of India in 1999 opened up the insurance sector by allowing private companies to solicit
insurance and also allowing FDI up to 26%. Ever since, the Indian insurance sector is
considered as a booming market with every other global insurance company wanting to
have a lion's share. Currently, the largest life insurance company in India is still owned
by the government.

In order to provide strict state control over Insurance business many acts were
passed, th first being The Insurance Act, 1938. The Life Insurance in India was
completely nationalised only on 19th Janurary, 1956 through the Life Insurance
Corporation Act, 1956. Nationalization was accomplished by the government acquisition
of the management of the existing insurance companies. This resulted in the formation of
the Life Insurance Corporation of India on 1st September 1956 which enjoyed complete
monopoly in the life insurance industry till the year 1999.

The remaining 100 odd General Insurance companies were nationalized by the
General Insurance Business (Nationalisation) Act, 1972 subsequently merging them into
four companies. All the companies were amalgamated into National Insurance, New

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India Assurance, Oriental Insurance, United India Insurance which were headquartered in
each of the four metropolitan cities.

Till end of 1999-2000 fiscal year, two state-run insurance companies, namely,
Life Insurance Corporation (LIC) and General Insurance Corporation (GIC) were the
monopoly insurance (both life and non-life) providers in India.The year 1999 saw the
entrance of private insurance companies in Indian insurance sector. The Govt. of India,
then introduced the Insurance Regulatory and Development Authority Act (IRDA) in
1999, thereby de-regulating the insurance sector and allowing private companies into the
insurance. Further, foreign investment was also allowed and capped at 26% holding in
the Indian insurance companies.

MAJOR PLAYERS

The private insurance joint ventures have collected the premium of Rs.1019.09
crore with the investment of just Rs.3, 000 crore in three years of liberalization. The
private life insurance players have been significantly improving their market share when
compared to 50 years Old Corporation (i.e. LIC). As per the figures compiled by IRDA,
the Life Insurance Industry recorded a total premium underwritten of Rs. 10,707.96 crore
for the period under review. Of this, private players contributed to Rs.1, 019.09 crore,
accounting for 10 percent. Life Insurance Corporation of India (LIC), the public sector
giant, continued to lead with a premium collection of Rs.9,688.87 crore, translating into a
market share of 90 per cent. In terms of number of policies and schemes sold, private
sector accounted for only 3.77per cent as compared to 96.23 per cent share of LIC (The
Economic Times, 21 March, 2004).

The ICICI Prudential topped among the private players in terms of premium
collection. It recorded a market share of 25 per cent, followed by Birla SunLife with 15

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percent, HDFC Standard and Max New York Life with a market share of approximately
15 per cent each.
In case of private non-life insurance players, which their market share raised to
14.13 per cent, recorded a growth of 70.75 per cent on an annual basis, while the market
share of public sector stood at 85.87 per cent, registering a marginal growth of 6.34 per
cent. The overall market has recorded a growth of 12.32 per cent by the end of January
2004. Among the private non-life insurance players, ICICI Lombard topped the list with
a market share of 3.05 per cent in one year period and with an annual growth rate of
131.6 per cent, followed by Bajaj Allianz with 2.91 per cent market share and Tata AIG
with 2.27 per cent market share and with an annual growth rate of 62.60 per cent.

LIFE INSURERS

� Life Insurance Corporation of India

� SBI Life Insurance Co. Ltd
� Allianz Bajaj Life Insurance Co. Ltd.
� Om Kotak Mahindra Life Insurance Co. Ltd.
ICICI Prudential Life Insurance Co. Ltd.
� HDFC Standard Life Insurance Co. Ltd
� Birla Sunlife Insurance Co. Ltd
� I�G Vysya Life Insurance Co. Ltd
� Tata-AIG Life Insurance Co.Ltd
� Metlife India Insurance Co. Pvt. Ltd
� AMP Sanmar Assurance Co. Ltd
� Dabur CGU Life Insurance Co. Pvt. Ltd
� Max �ew York Life Insurance Co. Ltd

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COMPANY PROFILE

India's Number One private life insurer, ICICI Prudential Life Insurance
Company is a joint venture between ICICI Bank Ltd.-one of India's foremost financial
services company- and Prudential plc - a leading international financial services group
headquartered in the United Kingdom. Total capital infusion stands at Rs. 20.60 billion,
with ICICI Bank holding a stake of 74% and Prudential plc holding 26%.
India’s number One private insurer,ICICI Prudential Life Insurance Company is a joint venture
between icici bank ltd one of India foremost financial services company and prudential plc a
leading international financial services group headquartered in uk tatal capital infusion stands at rs
20.60 billion,with icici bank holding a stake of 74% and prudentail

They began their operations in December 2000 after receiving approval from
Insurance Regulatory Development Authority (IRDA) and are headquartered in Mumbai.
Today, their nation-wide team comprises of over 580 offices, over 234,000 advisors; and
22 banc assurance partners.

INTRODUCTION OF ICICI PRUDENTIAL

ICICI Prudential was the first life insurer in India to receive a National Insurer
Financial Strength rating of AAA (Ind) from Fitch ratings. For three years in a row,
ICICI Prudential has been voted as India's Most Trusted Private Life Insurer, by The
Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted Brands'.
The ICICI Prudential edge comes from the commitment to their customers, in all
that they do – be it product development, distribution, the sales process or servicing.
ICICI Prudential products have been developed after a clear and thorough understanding
of customer needs. Having the right products is the first step, but it’s equally important to
ensure that customers can access them easily and quickly. To this end, ICICI Prudential
has an advisor base across the length and breadth of the country, and also partners with
leading banks, corporate agents and brokers to distribute their products. Robust risk
management and underwriting practices form the core of their business. With clear
guidelines in place they ensure a smooth and hassle-free claims process.

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Entrusted with helping customers meet their long-term goals, they adopt an
investment philosophy that aims to achieve risk adjusted returns over the long-term.
Their 16000+ strong staff is given the opportunity to learn and grow, everyday in a
multitude of ways. This keeps them engaged and enthusiastic, so that they can deliver on

the promise to cover customer, at every step of life.

For the past six years, ICICI Prudential has retained its position as the No. 1
private life insurer in the country, with a wide range of flexible products that meet the
needs of the Indian customer at every step in life.

PLANS

There are two main types of plans – ULIP and Traditional.

Unit Linked Insurance Product
ULIPs have gained high acceptance due to attractive features they offer. These
include:
� Flexibility: Flexibility to choose sum assured. Flexibility to choose premium
amount. Option to change level of Premium/ Sum Assured even after the plan has
started. Flexibility to change asset allocation by switching between funds.

� Transparency: Charges in the plan and net amount invested are known to the
customer. Customer has the convenience of tracking his/her investment performance
on a daily basis.
� Liquidity: Customer has the option to withdraw money after few years i.e. the option
of low minimum tenure. Partial or systematic withdrawals are allowed.
� Fund Options: A choice of funds is provided to customers ranging from equity, debt,
cash or a combination. They can choose the fund mix based on desired asset
allocation.

Traditional Endowment Plans

These are the old type of plans available. These plans cater to customers with a
low risk appetite. Some of the common features of the traditional plans are:
� Steady Investment: Major chunk of investible funds are in debt instruments. Though

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low, but steady and almost assured returns are expected over the long term.
� Death Benefit: death benefit is sum assured with guaranteed and vested bonus.
� Asset Creation: Helps in asset creation as they are for a long tenure.

� Fixed Ratios: Premium to sum assured ratios is fixed for each plan and age.
� Withdrawals: Withdrawals are generally not allowed before maturity.

PRODUCTS

INSURANCE SOLUTIONS FOR INDIVIDUALS

ICICI Prudential Life Insurance offers a range of innovative, customer-centric products

that meet the needs of customers at every life stage. Its products can be enhanced up to 4
riders, to create a customized solution for each policyholder.

Savings & Wealth Creation Solutions

� Cash Plus is a transparent, feature-packed savings plan that offers 3 levels of
protection as well as liquidity options.
� Save 'n' Protect is a traditional endowment savings plan that offers life protection
along with adequate returns.
� CashBak is an anticipated endowment policy ideal for meeting milestone expenses
like a child's marriage, expenses for a child's higher education or purchase of an
asset. It is available for terms of 15 and 20 years.
� LifeTime Super & LifeTime Plus are unit-linked plans that offer customers the
flexibility and control to customize the policy to meet the changing needs at
different life stages. Each offer 4 fund options - Preserver, Protector, Balancer and
Maximizer.
� Life Link Super is a single premium unit linked insurance Plan which combines life
insurance cover with the opportunity to stay invested in the stock market.
� Premier Life Gold is a limited premium paying plan specially structured for long-
term wealth creation.
� Invest Shield Life is a unit linked plan that provides premium guarantee on the

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invested premiums and ensures that the customer receives only the benefits of fund
appreciation without any of the risks of depreciation.

� Invest Shield Cash back is a unit linked plan that provides premium guarantee
on the invested premiums along with flexible liquidity options.

Protection Solutions
� LifeGuard is a protection plan, which offers life cover at low cost. It is available in
3 options - level term assurance, level term assurance with return of premium &
single premium.
� HomeAssure is a mortgage reducing term assurance plan designed specifically to
help customers cover their home loans in a simple and cost-effective manner.

Child Plans
� Education insurance under the Smart Kid brand provides guaranteed educational
benefits to a child along with life insurance cover for the parent who purchases the
policy. The policy is designed to provide money at important milestones in the
child's life. Smart Kid plans are also available in unit-linked form - both single
premium and regular premium.
Retirement Solutions
� ForeverLife is a traditional retirement product that offers guaranteed returns for the
first 4 years and then declares bonuses annually.
� LifeTime Super Pension is a regular premium unit linked pension plan that helps
one accumulate over the long term and offers an annuity option (guaranteed income
for life) at the time of retirement.
� LifeLink Super Pension is a single premium unit linked pension plan.
� Immediate Annuity is a single premium annuity product that guarantees income for
life at the time of retirement. It offers the benefit of 5 payout options.

Health Solutions
� Health Assure and Health Assure Plus: Health Assure is a regular premium plan
which provides long term cover against 6 critical illnesses by providing policyholder

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with financial assistance, irrespective of the actual medical expenses. Health Assure

Plus offers the added advantage of an equivalent life insurance cover.

� Cancer Care: is a regular premium plan that pays cash benefit on the diagnosis as
well as at different stages in the treatment of various cancer conditions.
� Diabetes Care: Diabetes Care is the first ever critical illness product especially for
individuals with Type 2 diabetes. It makes payments on diagnosis on any of 6
diabetes related critical illnesses, and also offers a coordinated care approach to
managing the condition. Diabetes Care Plus also offers life cover.
� Hospital Care: Hospital Care is structured to ensure customers receive a pre-
determined insurance amount for each procedure or hospitalization, even if they
spend less. Further, its long-term design of a term between 10-20 years, assures
policyholders the guaranteed cushion of insurance cover even if they make a claim
during the term. Available for individuals between the ages of 1-60 years, this is one
of the first products that will cover people up to the age of 80 years.

GROUP INSURANCE SOLUTIONS

ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance
benefits to their employees.
� Group Gratuity Plan: ICICI Prudential's group gratuity plan helps employers fund
their statutory gratuity obligation in a scientific manner. The plan can also be
customized to structure schemes that can provide benefits beyond the statutory
obligations.
� Group Superannuation Plan: ICICI Prudential offers both defined contribution
(DC) and defined benefit (DB) superannuation schemes to optimize returns for the
members of the trust and rationalize the cost. Members have the option of choosing
from various annuity options or opting for a partial commutation of the annuity at
the time of retirement.
� Group Immediate Annuities: In addition to the annuities offered to existing
superannuation customers, they offer immediate annuities to superannuation funds
not managed by them.
� Group Term Plan: ICICI Prudential's flexible group term solution helps provide
affordable cover to members of a group. The cover could be uniform or based on
designation/rank or a multiple of salary. The benefit under the policy is paid to the

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beneficiary nominated by the member on his/her death.

Flexible Rider Options

ICICI Prudential Life offers flexible riders, which can be added to the basic policy at a
marginal cost, depending on the specific needs of the customer.
� Accident & disability benefit: If death occurs as the result of an accident during the
term of the policy, the beneficiary receives an additional amount equal to the rider sum assured
under the policy. If the death occurs while traveling in an authorized
mass transport vehicle, the beneficiary will be entitled to twice the sum assured as
additional benefit.
� Critical Illness Benefit: protects the insured against financial loss in the event of 9
specified critical illnesses. Benefits are payable to the insured for medical expenses
prior to death.
� Income Benefit: This rider pays the 10% of the sum assured to the nominee every
year, till maturity, in the event of the death of the life assured. It is available on
SmarKid and CashPlus.
� Waiver of Premium: In case of total and permanent disability due to an accident,
the future premiums continue to be paid by the company till the time of maturity.
This rider is available with LifeTime Super, LifeTime Super Pension and CashPlus.

HISTORY OF ICICI PRUDENTIAL

As mentioned earlier ICICI Prudential Life Insurance Company is a joint venture
between ICICI Bank - one of India's foremost financial services company - and
Prudential plc - a leading international financial services group headquartered in the
United Kingdom.
HISTORY OF ICICI PRUDENTIAL
As mentioned earlier icici prudential life insurance company is a joint venture between icici bank
one of India foremost financial services company and prudential plc a leading international
financial services group headquarterd in tha united kingdom.

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ICICI Bank
ICICI Bank (�YSE:IB�) is India's second largest bank and largest private sector bank
with over 50 years presence in financial services and with assets of over Rs 3446.58 bn

(USD 79 billion) as on March 31, 2007. The Bank offers a wide range of banking
products and financial services to corporate and retail customers through a variety of
delivery channels and through its specialized subsidiaries in the areas of investment
banking, life and non-life insurance, private equity and asset management. ICICI Bank is
a leading player in the retail banking market and services its large customer base through
a network of over 950 branches and extension counters, 3300 ATMs, call centers and
internet banking to ensure that customers have access to its services at all times.
Prudential Plc
Established in London in 1848, Prudential plc, through its businesses in the UK and
Europe, the US and Asia, provides retail financial services products and services to more
than 20 million customers, policyholder and unit holders and manages over £251 billion
of funds worldwide (as of 31 December 2006). In Asia, Prudential is the leading
European life insurance company with life operations in China, Hong Kong, India,
Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand, and
Vietnam. Prudential is the second largest retail fund manager for Asian sourced assets ex-
Japan as at June 2006. Its fund management business has expanded into a total of ten markets:
China, Hong Kong, India, Japan, Korea, Malaysia, Singapore, Taiwan, Vietnam
and United Arab Emirates.
ICICI Prudential has been the market leader in the private life insurance sector
contributing to 30% of the growth share followed by the SBI Life Insurance with 18%
share. Members like Ms. Shikha Sharma, C.E.O & M.D., Ms. Anita Pai, E.V.P –
Customer Service & Technology, Mr. Puneet Nanda, C.I.O, Mr. Binayak Dutta, Chief –
Sales & Distribution, have been with the company since its inception in 2000 and are
instrumental in developing ICIC Prudential to this level.
The first policy was sold on 12th December, 2000. Within 1 year ICICI Prudential
achieved 25000 policies and thereby growing at a faster rate achieved 1 million policies
by October, 2004. By 2010 ICICI Prudential has a target to achieve 20 million customers.

AWARDS & RECOGNITION

AWARDS

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� India's Most Customer Responsive Insurance Company
Avaya GlobalConnect - Economic Times

Customer Responsiveness Awards.

� Most Trusted Private Life Insurer

The Economic Times - A C Nielsen Survey of Most Trusted Brands – 2003,
2004 and 2005.
� Prudence Customer Centricity Award 2004 & 2005
Prudential Corporation Asia.
� Best Life Insurer 2003
Outlook Money Awards 2003 & 2004
� Superbrand 2003-04
� Silver Effie for Effectiveness of the ‘Retire from Work not life’ advertising
campaign
Effies 2003
RECOGNITIONS
� IMM Award for Excellence
Institute of Marketing & Management
� Organisation with Innovative HR Practices
Indira Group of Institutes
� Most Trusted Private Life Insurer
The Economic Times - A C Nielsen Survey of Most Trusted Brands – 2003,
2004 and 2005.
� Prudence Customer Centricity Award 2004 & 2005
Prudential Corporation Asia.
� Best Life Insurer 2003
Outlook Money Awards 2003 & 2004
� Superbrand 2003-04
� Silver Effie for Effectiveness of the ‘Retire from Work not life’ advertising
campaign
Effies 2003

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Review of Literature
Mehr and Cammack (1976) agrees that insurance is usually thought of as a product that spreads the
risk of serious, but low-probability, losses among a group of individuals, thus providing some
financial protection to each individual. Kunreuther, (1979) said that his product makes good sense,
particularly when the protection is purchased against potential losses so large as to be catastrophic,
such as total destruction of one's home, a large accident liability judgment, or death of primary
family breadwinner. However, it has long been recognized that this sensible product is difficult to
sell.v

Kahneman & Tversky, (1984) stated indeed, repeated demonstrations have shown most people lack
an adequate understanding of probability and risk concepts Dhar, (1997) Greenleaf and Lehmann,
(1995) Tversky and Shafir, (1992) have shown that offering more options can generate decision
conflict and preference uncertainty, leading to decision deferral.

Kotler, (1973) considers insurance to be in the category of "unsought goods," along with products
such as preventive dental services and burial plots.He notes that unsought goods pose special
challenges to the marketer.

Slovic, Fischhoff, Lichtenstein, Corrigan, and Combs (1977) found that subjects were more likely
to buy insurance against small, high-probability losses than insurance against large, low- probability
losses, Hershey and Schoemaker (1980) reported the opposite result.

Kunreuther (1979) “It is not the magnitude of a potential loss that inspires people to buy insurance
voluntarily – it is the frequency with which a loss is likely to occur”.

Michael L. Smith (1982) said that a typical life insurance contract provides a package of options or
rights to the policy owner that is not precisely duplicated by any other combination of commonly
available contracts. Viewed from this perspective, life insurance enjoys a unique position in the
field of investments and should be judged in this light. The paper shows that an options viewpoint
provides a more complete explanation of policy owner behavior towards life insurance than the
conventional savings-and-protection view.

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 Michael L. Walden (1985) told that the option's package view of the whole a
whole life policy is a package of options, each of which has value and is expected to influence the
price of the policy. This viewpoint implies the general hypothesis that price differences between
whole life policies can be explained by differences in policy contract provisions and differences in
selected company characteristics.

OBJECTIVE :

o To evaluate the factors underlying consumer perception towards investment in life insurance
policies.
o To compare the differences in consumer perception of male and
female consumers.

RESEARCH METHODOLOGY

The Study: The study was exploratory in nature with survey method being used to complete the
study.

Sampling Design

Population:

Population included investors in NCR 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.

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Sampling Techniques:
Random sampling technique was used to select the samples.

Sample Size:
Sample size was 150 respondents.

Tools Used for Data Collection

Self designed questionnaire was used for the evaluation of factors affecting consumer’s perception
towards insurance. Data was collected on Likert’s type scale, where 1 stood for minimum
agreement and 7 stood for maximum agreement.

Tools Used for Data Analysis

Item to total correlation was applied to check the internal consistency of the questionnaire. The
measures were standardized through computation of reliability and validity.
Factor analysis was applied to identify the underlying factors.

Z-test was applied to find out the significant differences between male and
female investors.

Results and Discussions

Consistency Measure

Firstly consistency of all the items in the questionnaire is checked through item to total correlation.
Under this correlation of every item with total is measured and the computed value is compared
with standard value (i.e. 0.1590). If the computed value is found less than standard value then
whole factor/statement is dropped and will be termed as inconsistent.

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S.NO ITEMS COMPUTED CONSISTE ACCEPTED/
CORRELATIO NT DROPPED
N VALUE
1. Awareness about terms and conditions of 0.671575 Consistent Accepted
policy.
2. Provide services on time. 0.651847 Consistent Accepted
3. Provide satisfactory services. 0.573518 Consistent Accepted
4. Goodwill of the company. 0.607722 Consistent Accepted
5. Agent is well informed about policies. 0.640696 Consistent Accepted
6. Co-operative and friendly agent. 0.598089 Consistent Accepted
7. Agent respond promptly 0.696914 Consistent Accepted
8. Proper reminder of installments by 0.531124 Consistent Accepted
agents.
9. Employees responsible towards 0.685817 Consistent Accepted
customers
10. Benefits are met by policy. 0.510702 Consistent Accepted
11. Selection of highly reputed company. 0.634614 Consistent Accepted
12. Reputation of the insurance company. 0.582977 Consistent Accepted
13. Hassle free settlements 0.594282 Consistent Accepted
14. Personal attention on every costumer. 0.640192 Consistent Accepted
15. Understand Customer’s financial needs. 0.603133 Consistent Accepted
16. Fulfill its promise towards policy. 0.613243 Consistent Accepted
17. Provides the claims on time. 0.474994 Consistent Accepted
18. Settlement of claims easy and timely. 0.569959 Consistent Accepted
19. Satisfy with relationship to company. 0.621496 Consistent Accepted
20. Company able to fulfill expectation. 0.594265 Consistent Accepted
21. Only company I want to associate 0.519161 Consistent Accepted
myself.
22. Purchase more policies from the same 0.502876 Consistent Accepted
company.

23. Suggest friends and family to purchase 0.540626 Consistent Accepted

policy from the same company

24. Policy benefits benchmarks. 0.62874 Consistent Accepted

25. Investment in life insurance is more 0.376874 Consistent Accepted
secure than stock market
26. Purchase further policies from other 0.091102 Inonsistent Dropped
companies.

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 Reliability
Reliability test was carried out using SPSS software and the reliability of the items was measured.
The result is as follows:

Cronbach’s Alpha 0.919

It can be seen that the reliability value is more than 0.7. So, the questionnaire is
highly reliable.

Description of factors

1. Company Loyalty

This factor includes that this is the only company the consumer wants to associate himself with, in
future (0.814), himself would purchase more policies from the same company (0.799), suggest
friends and family to purchase policy from the same company (0.790), company able to fulfill
expectation, (0.599), Policy benefits benchmarks (0.545). The highest Eigen value lies in this factor
35.213. So it is been considered as the highly contributing factor towards study. Therefore it is
clear that company loyalty plays an important role in investment decisions of investors.

2. Services Quality
This factor includes hassle free settlements (0.693), employees responsible towards customers
(0.631), agents respond promptly (0.611), investment in life insurance is more secure than stock
market (0.563) satisfy with relationship to company (0.537). As we can see, that the Eigen value for
factor service quality is 9.753 , which is also a contributing factor towards the study, so it can also be
considered as an the study.

3. Ease of Procedures
This factor includes the company provides claims on time (0.852), co- operative and friendly agent

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(0.662), settlement of claims easy and timely (0.651), agent is well informed about policies (0.486). As
we can see, that the Eigen value for factor ease of procedures is 5.830 , which is also a contributing
factor towards the study, so it can also be considered as an important factor inconsumer’s financial
needs (0.404). As we can see, that the Eigen value for factor company client relationship is 4.051,
which is also a contributing factor towards the study, so it can also be considered as an important factor
in the study.

4. Satisfaction Level
This factor includes that the suggested benefits of Insurance Policy should be met to the investors
( 0.774), Company provides them satisfactory services (0.631), fulfill its promise about life
insurance policy (0.575), Services should be provided on time(0.515), and awareness of terms and
conditions of policies. As we can see, that the Eigen value for factor satisfaction level is 5.008 ,
which is also a contributing factor towards the study, so it can also be considered as an important
factor in the study.

5. Company Image
This factor includes that the insurance company should be well known in the industry (0.777),
insurance provider should have goodwill in market (0.758), and company of high repute (0.428).As
we can see, that the Eigen value for factor company image is 4.878, which is also a contributing
factor towards the study, so it can also be considered as an important factor in the study.

6. Company-Client Relationship
This factor includes that the agent remind about premium installments (0.778), pay personal
attention on every consumer (0.505) and understand consumer’s financial needs (0.404). As
we can see, that the Eigen value for factor company client relationship is 4.051, which is also a
contributing factor towards the study, so it can also be considered as an important factor in the
study.

Z-Test

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Z-test was applied to find out significant difference between male and female investor’s perception
towards investment in life insurance policies.

For applying Z-test mean and standard deviation was calculated, then values were put in formula to
calculate standard error.

Null Hypothesis Ho: It states that there is no significant difference between the perception of male
and female investors towards investment in life insurance policies.

GENDER MEAN S.D. SAMPLE SQUARE

SIZE OF
S.D.

MALE 141.04 20.078 75 403.146

FEMALE 145.94 17.701 75 313.348

Z = 1.5877
Since the value of Z is less than the standard value 1.96 at 5% level of significance, so the null
hypothesis is accepted. Therefore there is no significant difference between the perception of male
and female investors towards investment in life insurance policies.

CONCLUSION

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 compare the differences in consumer
perception of male and female consumers. The tests that were used for our research activities were-
Item to Total Correlation Test, which we applied on 26 items and only one was dropped out, 25
items being accepted. Next was Reliability Test to check the reliability of the items. The
result was 0.915. Therefore the items were highly reliable. Then we applied the Factor Analysis

19
 Test, and the six factors that came out were Consumer Loyalty, Service Quality, Ease of
Procedures, Satisfaction Level, Company Image, and Company-Client Relationship.

The consumer’s perception towards Life Insurance Policies is positive. It developed a positive mind
sets for their investment pattern, in insurance policies. Still some actions are needed for
developing insurance market. The major factors playing the role in developing
consumer’s perception towards Life Insurance Policies are Consumer Loyalty, Service Quality,
Ease of Procedures, Satisfaction Level, Company Image, and Company-Client Relationship.

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.

References
Berger, Jonah A.; Michaele Draganska;
Itamar Simonson (1938); Stanford
University; Graduate School of
Business.
Dhar, Greenleaf and Lehmann, Tversky
and Shaffer( 1997) by Journal Of
Consumer Research ,(Vol. 24).

Diacon. Stephen, (2001); International

Journal of Bank Marketing.

Formisano, Roger A. (1981); The

Journal of Risk and Insurance, (Vol.48
no.1, pp59-79).

Fried, B. Robert and Lewis, Staphanie

E., (2004) Choosing a Long Term
Insurance Policy: Understanding and
Improving the Process.

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Grundel , Helmut ; Post, Thomas;
Schulze Roman; (2005); Managing
Demographic Risk in Life Insurance
Company.

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