Analysis of consumer behavior and decision-

making variables about Life insurance policies

Submitted to-
Prof. Dr. J.K. Nayak
BMN- 530
Marketing Research

Group 7
Team Members
Viren Modi             - 21810034
Onkar Vaidya         - 21810041
Malav Parasar        - 21810042
Pratik Vaidya           -21810048
Shail Shah               - 21810069
Meenu Kumari - 21918009
1. Abstact

Human life is a valuable asset, and life insurance is the most common type of insurance that
protects a person and his family financially in the event of unforeseen dangers or harm.
Individuals can benefit from life insurance in terms of safety and protection, as well as
savings. The current exploratory and descriptive study was chosen with the goal of
identifying the factors that influence customers' policy purchasing decisions and analysing
consumer preferences while making life insurance investment decisions. The article goes
through a number of insurance-related topics. The study's data was gathered from both
primary and secondary sources. The study is limited to IIT Roorkee, with a sample size of
69 people. The study aims to determine the type of policy that the respondent prefers, the
insurance company that they prefer, the feature of the insurance policy that drew them in,
the benefit for which they purchased, the level of satisfaction with the life insurance policy
purchased, and the difficulties encountered in making a decision while purchasing a life
insurance policy. The study also looks at the link between age and the type of policy that
people choose.

2. Introduction

Insurance is a way of safeguarding against financial loss. It's a type of risk management that's
generally utilised to protect against the danger of a speculative or unpredictable loss. The
risk of death, disability, or destruction surrounds an individual's life and property. These
dangers could lead to financial losses. Insurance is a smart approach to transfer these risks
to a third party. The insurance policy specifies the rules and situations under which the
insurance company will pay the insured person or nominees the insurance sum. Insurance is
a means of safeguarding yourself and your loved ones from financial ruin.

It is a contract between an insurance company and a person who has his life insured in
exchange for the payment of a quantity of money in the event of an adverse event.
Everyone should have life insurance since life is so valuable. The payment is made to the
insurer on the maturity date or in the event of an untimely death. A individual who receives
his life insurance under the provisions of a contract. Life insurance is widely recognised as a
risk-free investment that provides assurance rather than uncertainty and comes to the
family's rescue in the terrible case of death.

3. DEFINITION OF BUYING BEHAVIOR

The decision-making processes and actions of people who buy and use things are referred to
as buying behaviour. 'Consumer behaviour is the activities and decision processes of people
who acquire products and services for personal consumption,' according to Engel, Blackwell,
and Mansard.

4. CUSTOMER BUYING BEHAVIOR

The action made by a customer before purchasing a product or service is referred to as

customer buying behaviour. This may entail using search engines, responding to social media
posts, or taking a variety of other steps. Understanding this process is beneficial to

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 businesses because marketers can forecast how customers will react to marketing
strategies. The final end-user customer's buying behaviour is referred to as customer buying
behaviour. Customers are the life insurance industry's most important pillar. To keep
revenues high, every firm works to acquire and retain existing clients. Insurance providers
may improve their products and services by having a better understanding of their
consumers, their requirements, and their expectations. In comparison to developed
international countries, India's life insurance business is quite small.

5. STATEMENT OF PROBLEM

Management of insurance firms is a difficult task. In this business, there are numerous
issues. One of the most significant conflicts is competing with a competitor. In order to
improve corporate operations, the corporation must understand customer purchasing habits
when it comes to life insurance coverage. The growth and failure of a firm is determined by
the purchasing habits of its customers. As a result, the company must understand the
elements that impact a client's purchasing behaviour, such as safety, need, and financial
security, as well as how a customer selects a policy and their future expectations regarding a
life insurance company's future policy plan. This research aids the company in determining
the elements that impact customers and how they are influenced. how they choose a firm's
policy and what they expect from future plans supplied by the life insurance company.

6. OBJECTIVE OF THE STUDY

 To figure out why you'd want to get insurance.

 To find out how customers buy life insurance and what they expect from the
company.
 To find out what people think about insurance agents' services.
 To investigate the many sorts of benefits offered by insurance providers.
 To offer the company with information on clients' insurance policies
 For Identifying the characteristics of a corporation that entice customers to purchase
insurance

7. DATA COLLECTION

The information was gathered from both primary and secondary sources. A questionnaire
was used to obtain primary data. The research was conducted through direct personal
interviews. The project's data sources include both primary and secondary data. Primary
data is information that is obtained for the first time in order to get more knowledge about a
specific topic. The core data for this study was gathered through a questionnaire. Secondary
data: This information is gathered from published sources such as magazines, newspapers,
and a variety of publications, as well as the website www.policybazaar.com.

8. SAMPLE DESIGN

Convenient sampling method is adopted for the purpose of study.

9. TOOLS USED FOR THE STUDY

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 The laws of statistics in research are to utilise them as a tool in designing research, analysing
data, and drawing conclusions. Most research investigations generate a huge amount of raw
data that must be reduced to make it easier to interpret and use for future analysis.
 Simple percentage analysis
 Ranking analysis
 Weighted average analysis
 Chi square analysis

10. ANALYSIS AND INTERPRETATION

The analysis and interpretation of a study on patient perception and satisfaction with the
service quality of primary health care centres based on information provided by a sample of
110 respondents from Coimbatore city are presented in this chapter. This chapter is divided
into four sections, each of which contains four separate analyses:
 Simple percentage analysis
 Rank analysis
 Weighted average analysis
 Chi square analysis

11. Demographics

12. SIMPLE PERCENTAGE ANALYSIS

Simple percentage analysis is one of the most extensively used statistical strategies for
analysing and interpreting primary data. It is concerned with the proportion of respondents
who responded to a specific question from the total population chosen for the study. The
equations can be used to calculate the simple percentage.

= Actual respondents /Total number of respondents × 100

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PERCEPTION ABOUT LIFE INSURANCE OF THE RESPONDENTS:

INTERPRETATION

The perceptions of respondents concerning life insurance are shown in this table. Life
insurance is viewed as a saving tool by 14.5% of respondents, a tax saving device by 8.5%
respondents, and a means to protect our family by the remaining 73.9% percent of
respondents. And only 1.4% think it as a saving tool and also for protection of family and
another 1.4% respondents think of it as a deposit at time of need.

WEIGHTED AVEREAGE ANALYIS

A weighted average is a calculation that considers the relative value of the integers in a data
collection. Each value in the data set is multiplied by a predefined weight before the final
computation is completed when calculating a weighted average.
A weighted average can be more accurate than a simple average in which all numbers in a
data set are assigned an identical weight.

FACTORS OF LIFE INSURANCE COMPANY

4
Levels Highly Satisfied Dissatisfied Highly Total Mean

5
 Satisfied Dissatisfied Score
Factors 4 3 2 1 wx
Money 6 59 4 0 69 3.02
back 24 177 8 0 209
Guarantee
Easy 13 50 6 0 69 3.10
Access to 52 150 12 0 214
agent
Low 6 45 16 2 69 2.78
premium 24 135 32 1 192
Risk 11 51 7 0 69 3.06
Coverage 44 153 14 0 211

INTERPRETATION
The above table demonstrates the respondents' satisfaction with the factors of the life
insurance business. The factor money back guarantee has the mean score of 3.02. The factor
of risk coverage has the mean score of 3.06. And the factor easy access to agent has a mean
score of 3.10. The factor low premium has a mean score of 2.78.

13. RANK ANALYSIS

Respondents are asked to rank the options in this technique. This method is less time
consuming and more efficient. Respondents were asked to rank the various attributes of an
agent in this study, and they were given the numbers 1,2,3,4, and 5. 1 being the lowest and
5 being the highest. The overall score was calculated by adding the scores of each
anticipation of 69 respondents. The total score was used to determine the final ranking, and
the results are listed in the table below.

QUALITY
OF RANK TOTAL RANK
AGENT 1(1) 2(2) 3(3) 4(4) 5(5)
Knowledge 0 1 15 43 5 69 4
of the policy
0 4 45 172 25 246
Investment 0 4 22 34 9 69 3
advice
0 8 66 136 45 255
Convincing 0 4 9 42 14 69 1
approach
0 8 27 168 70 273
Handling of 0 2 16 39 12 69 2
documents
0 4 48 156 60 268

INTERPRETATION
Convincing approach is ranked 1 while handling of documents is ranked 2. Investment advice
is ranked 3 and knowledge of the policy is ranked 4.

14. CHI - SQUARE ANALYSIS

Under a specific hypothesis, a statistical test is performed to evaluate the probability of

getting the observed by chance. It's used to see if a population's standard deviation is equal

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 to a certain figure. Chi-square is a frequency-based statistical significance test that can be
used on both qualitative and quantitative variables. The most popular applications are
testing hypothesised probabilities or probability distributions, statistical dependence or
independence, and common population. If the null hypothesis is true, a chi-square test is
any statistical hypothesis test in which the test statistic is a chi-square distribution.

FORMULA
X2= Ʃ (Oi – Ei)/Ei
WHERE O – Observed frequency
E – Expected frequency
Degree of freedom = (R-1) (C-1)
When, R = Row total C = Column total

RELATIONSHIP BETWEEN AGE AND RESPONDENTS’ PREFERENCE OF LIFE INSURNCE

COMPANY

AGE Life Insurance Companies TOTAL

LIC ICICI SBI LIFE TATA AIA HDFC LIFE
18-25 38 5 4 6 4 57
26--35 8 1 1 1 1 12
TOTAL 46 6 5 7 5 69

HYPOTHESIS
There is no significant between age and respondents’ preference of Life Insurance Company

CHI SQUARE TEST

Factor Calculated Value Degree of P-Value Remarks

freedom
Age 0.0966 4 0.99887 Accept

We do not have significant evidence at p = 0.05 to reject the null hypothesis. Therefore, we
can say that there is no significant relationship between age and Life insurance choice.

FINDINGS, SUGGESTION AND CONCLUSION

FINDINGS
 Majority have the perception of life insurance as a tool to protect our family, held by 73.9
percent of respondents.
 The factor Easy access to agent of a life insurance business accounts for the majority of the
mean score level 3.10.
 The ranking chart shows that Convincing power is ranked first, Handling of documents is
ranked second, and investment advice is placed third ranked third, and knowledge of policy
fourth.
 According to the results of the chi-square test, there is no link between age and
respondents' choice for Life Insurance Company.

SUGGESTIONS

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  Because there is a lack of awareness of insurance among the general public, it should be
raised by holding stage presentations and discussing its value and necessity.
 Rather than focusing on tax benefits, insurance companies should develop plans that
provide effective risk coverage and stimulate long-term insurance investment.
 Customer relationships should be maintained by inviting existing customers to seminars held
when releasing a new product or making any modifications to the products or policies in
order to retain them.

CONCLUSION

The purpose of this research is to look into the purchase habits of customers at a life insurance
company. It revealed some interesting trends, which may be seen in the graph above. The majority
of those polled said they would be willing to invest in a government-owned insurance firm (LIC). As a
result, private insurance companies must concentrate on promotional activities in order to boost
their brand recognition among customers. Customers are looking for more innovative insurance with
a high rate of return and additional policy perks. Customers expect life insurance companies to
deliver digitalized services, so they should be provided. Customers are pleased with the life
insurance company's coverage. Still, some customers see life insurance as only a way to save money.
Life insurance companies must persuade individuals that life insurance is a tool to protect their
families in the future. Customers trust agents for the purchase and subsequent processes of life
insurance, such as payment of premiums, clarification of doubts, and so on, thus the public's
perception of policy and agents still needs to be improved.