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Journal of Exclusive Management Science – June 2018 - Vol 7 Issue 06 – ISSN 2277-5684
Alok Mittal and Akash Kumar (2003), in their study “An Exploratory Study of Factors Affecting
Selection of Life Insurance Products” have attempted to identify the factors which are affecting the
consumers in taking into consideration before selecting a life insurance product and determining
the extent to which these factors are taken into consideration for choosing life insurance
products. The study highlighted that consumers take into consideration factors like product
attributes, customer delight, payment mode, product flexibility, risk coverage, grace period,
professional advisor, and maturity period as important before making a decision on selection of a life
insurance product but most important factors which are of vital importance was product attributes,
and the least important was maturity period.
Vijay Kumar (2012), in his PhD thesis, “A Contemporary Study of Factors Influencing Urban
and Rural Consumers for Buying Different Life Insurance Policies in Haryana”, makes an in-
depth study of the factors influencing buyer behaviour for buying life insurance policies in Haryana.
The survey was conducted in Haryana on 1000 policyholders. The study outlines that the insurance
agent was the most influential factor for selecting the life insurance policy among rural and
urban policyholders. The other crucial determinants of buying behaviour were also identified
such as income, economic status, product attributes, agent attributes, and price. The result
indicates that there was a significant difference in the buying behaviours of rural and urban
policyholders.
Research Methodology
The study carried on the life insurance investor of the areas of Aurangabad to know the factors that
investors prefer the most while investing in life insurance products and also it reveals the several
aspects on which an investor put the greater emphasis while investing their money in the life insurance
products.
1. Data collection
a) Research design: This study analysis the different variables which effect on the investment
in life insurance. Moreover to that it will define several factors at the end of the analysis on the basis
of the behavior of the factors, so it‟s a exploratory and descriptive study.
b) Type of data: I have used both primary and secondary data for the paper.
Primary Data- Primary data have been collected through the close ended and for knowing
overall satisfaction open ended structured questionnaire from different Investors from the different
areas of Aurangabad.
Secondary Data- Secondary data have been collected through the different sources like websites,
newspapers, magazines, articles and other published and unpublished researches.
c) Methods of data collection: I have used survey method and the tool used is questionnaire for data
collection.
d) Sampling Method: Convenience sampling method is used because I have chosen the
sampling elements on the basis of reference and my conveniences. Convenience sampling is a non-
probability sampling technique where subjects are selected because of their convenient
accessibility and proximity to the researcher.
e) Sampling:
Sample Size: 100
Sampling area: Areas of Aurangabad
Sampling unit: Life Insurance Investors
Data Analysis and Interpretation:
Test of Reliability (Cronbach’s Alpha)
Cronbach's alpha is a measure of internal consistency, that is, how closely related a set of items are as
a group. It is considered to be a measure of scale reliability. A "high" value for alpha does not imply that
the measure is unidimensional.
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Journal of Exclusive Management Science – June 2018 - Vol 7 Issue 06 – ISSN 2277-5684
Reliability Statistics
Cronbach's Alpha Cronbach's Alpha Based on N of Items
Standardized Items
.589 .608 10
a.List wise deletion based on all variables in the procedure.
Interpretation: As the above statistics of reliability shows the Cronbach‟s Alpha 0.589, is
greater than 0.5, which means that scale used to collect the data is reliable and data accuracy
have been maintained during the collection of data from the respondents. This also indicates that data
is reliable for the further study as the calculated reliability value approx. 58.9% which is good.
Kaiser-Meyer-Olkin(KMO) and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .313
Approx. Chi-Square 281.365
Bartlett's Test of Sphericity Df 28
Sig. .000
Bartlett’s test
Bartlett‟s test is another identification of the strength of the relationship among variables. This tests the
null hypothesis that the correlation matrix is an identity matrix. An identity matrix is matrix in which
all of the diagonal elements are 1 and all off the diagonal elements are 0. From the same table,
Bratlett‟s test of sphericity is significant that is, its associated probability is less than 0.5. in fact, it is
actually 0.000 i.e, the significance level is small enough to reject the null hypothesis. This means that
correlation matrix is not an identity matrix.
Communalities
Initial Extraction
After death benefit 1.000 .570
Source of income to family 1.000 .565
Tax benefit in current period 1.000 .942
Maturity benefit 1.000 .747
Investment source 1.000 .651
Utilization of saving 1.000 .523
High income 1.000 .801
Family safety 1.000 .491
Extraction Method: Principal Component Analysis.
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Journal of Exclusive Management Science – June 2018 - Vol 7 Issue 06 – ISSN 2277-5684
The above stated table repsents the Communalities, which explains the relation between the varibles.
Component Initial Eigenvalues Total Variance Explained Extraction Rotation Sums of Squared Loadings
Sums of Squared Loadings
The above table shows the how the variance divided amongst the eight possible factors. Amongst which 3 factor having an Eigen value greater than
1.00 which is a common criterion for a factor to be useful
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Journal of Exclusive Management Science – June 2018 - Vol 7 Issue 06 – ISSN 2277-5684
The scree plot is a graph of the eigen values against all the factors. The graph is useful for determining
how many factors to retain. The point of interest is where the curve starts to flatten. It can be seen that
the curve begins to flatten between factors 3 and 4. Note also that factor 4 has an Eigen value of less
than 1, so only three factors have been retained.
Eigen value: The standardized variance associate with a particular factor. The sum of the eigen values
scan not exceeds the number of items in the analysis, since each item contributes one to the sum of
variances.
Component (factor) Matrix:
The table below shows the loadings of the eight variables on the three factors extracted. The
higher the absolute value of the loading, the more the factor contributes to the variable. The gap on the
table represents loadings that are less than 0.5, this makes reading the table easier.
Suppressed all loadings less than 0.5.
Component Matrixa
Component
1 2 3
Investment source .766 -.488
High income .749
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Journal of Exclusive Management Science – June 2018 - Vol 7 Issue 06 – ISSN 2277-5684
Component
1 2 3
High income .877
Investment source .802
Family safety .678
Source of income .575 -.371 .311
After death benefit to -.530
family .488
Maturity benefit .857
Utilization of saving -.309 .654
Tax benefit in current -.954
period
Simple component matrix which should be only useful to get the information about the factors.
For the better factor reduction Rotated factor matrix would be more useful than that.
Rotated Component (Factor) Matrix:
The idea of rotation is to reduce the number of factors on which the variables under
investigation have high loadings. Rotation does not actually change anything but makes the
interpretation of the analysis easier. Looking at the table above, it can be observed that High Income is
substantially loaded on Factor (Component) 1 while Maturity Benefit is substantially loaded
on Factor (Component) 2. And Investment source is loaded on Factor (Component) 3. These factors
can be used as variables for further analysis and further more concluded that maximum variance
in the Life Insurance have been explained by these three variables.
Findings:
A greater number of customers of LIC are either fully or partially satisfied but there is not much
significant difference across sectors in terms of service quality satisfaction level.
According to the survey high income, is the most important criterions which is accepted among all
the respondents towards their investment alternatives followed by Safety and maturity.
According to the study company image is to be the highly important criteria, which we consider
before taking up a life insurance this is mainly because people expect safety and security for their
money which they invest, followed by the factor Premium which we pay to the insurer and then
Bonus and Interest paid by the company, services etc.
The customers in general while choosing a policy from LIC of India, give first preference to the
amount of high income, family safety and tax benefit. They consider the risk benefit as least
important to select a Policy.
The customers of LIC of India reported a high level of satisfaction relatively with other selected
Private LIC Companies.
The most important factors adopted by the respondent in selecting a policy. The highest score is the
first rank for high income, the last rank selected by the respondent which is utilization of saving. It is
inferred from this Table that an individual chooses the policy based on his own perceptions in order to
satisfy his/her needs.
Suggestions:
The customer satisfaction should be the main focus of any service firm especially to the Life
insurance Company. This will be result in customer retention leading to improved profitability and
growth of the Life insurance institutions.
The Life insurance companies should ensure effective marketing information and
communication facilities. The strategic planning should be adopted deliberately to identify and satisfy
the customer' needs and wants.
Some special focus should be laid on individual risk coverage while designing the products.
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Journal of Exclusive Management Science – June 2018 - Vol 7 Issue 06 – ISSN 2277-5684
The Insurance company, if possible should invest in advertising, conduct road shows, and spend
money on hoardings, so that it can propagate better awareness about its various lesser known
products.
To sell insurance products through electronic Medias. People becoming more aware and demanding
so there is scope for a whole lot of innovative products.
Bibliography:
Agarwal A.N. (2005): Indian Economy- Problems of Development and Planning, Wishwa
Prakashan, New Delhi.
Annual Reports of LIC (from 1999 – 2007) Insurance Principles and Practice by M.N. Mishra – S
Chand Publishers – 2008 Edition.
A K Sukla (2006), “The Journal of Insurance Institute of India”, Vol.XXXII, Jan.-June 2006, Page
No.10.
C.S. Rao (2007), “The Regulatory Challenges Ahead” Journal of Insurance Chronicle,Vol.VII,
issue-X, Oct.2007.
Dr.A.K. Jain (2004), “The Journal of Insurance Institute of India”, Vol.XXX, July-
Dec.2004, Page No.53.
I.R.D.A., Annual Reports, 2002-03, 2003-04, 2004-05 and 2005-06, www.irdaindia.org
International Insurance Factbook (2004): World Ranking, Journal of Banking and Finance,
Volume 17, 483-496.
Life Insurance Corporation of India (2005): 48th Annual Report, 31st March.
Mehlwal Geetanjali (2006): The face of the Insurance Industry in India, ICFAI Insurance Chronicle,
January.
Peter Drucker (1999), “Innovate or Die”, Journal of Economist 25th Dec.1999.
Prasad K.N. (2003): Indian Economy- before and Since the Reform, Atlantic Publishers and
Distributors, New Delhi.
Weiss,M.A.,1990, “Productivity Growth and Regulation of P/L Insurance:1980-84.
T.S. Ramakrishna Rao (2000), “The Indian Insurance Industry the Road Ahead” Journal of Insurance
Chronicle Vol.III, Issue-I, Jan.2007, Page No.31.
Sabera (2007), “Journal of Insurance Chronicle”, Vol.VII, Issue-I, Jan.2007, Page No.37.
Questionnaire
“A STUDY OF VARIOUS FACTORS
INFLUENCING IN LIFE INSURANCE CORPORATION”
Dear Sir/ Madam,
This is to request you kindly spare your valuable time to respond a questionnaire for a research paper
on the above stated topic.
Thank you.
Name :
1. Gender:
a) Male b) female
2. Age:
a) 18-34yrs b) 35-44yrs
c) 45-55yrs d) 55 above
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Journal of Exclusive Management Science – June 2018 - Vol 7 Issue 06 – ISSN 2277-5684
3. Annual Income:
c) 8Lac-12Lac d) 12Lac-16Lac
5. Saving Rate:
c) 20%-30% d) 30%-40%
a)Yes b) No
c) Rs.20,000-Rs.30,000 d) Rs.30,000-Rs40,000
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Journal of Exclusive Management Science – June 2018 - Vol 7 Issue 06 – ISSN 2277-5684
10. Did you receive returns as per your expectations from LIC policy?
a) Yes b) No
a) Yes b) No
Date Signature
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