Growing Awareness of Term Insurance Plans – A Study of Insured Citizens in Thane District

Abstract: 

The term ‘Insurance’ is broadly classified into two major segements as Life Insurance and General Insurance. Life Insurance policies are also sub divided into regular policies with profit, policies without proft, pension policies, childrens’ insurance plans. As compared to all these, term insurance is unique in nature. Term insurance policy is taken for a certain stipulated period. The main hitch of this insurance contract is, incase of unfortunate death of the policyholder the sum assured is paid to the nominee, however, if the insured completes the insurance term on maturity nothing is paid to the insured or nominee. Term insurance is the pure life insurance. Term insurance provides a very high insurance cover by charging a very low or reasonable amount of premimum. The traditional life insurance policies provide comparatively lower amount of insurance cover at a high amount of premium. On this background, term insurance has proved its uniqueness. The basic principle of insurance is ‘Insurance is for protection and not for profit’. In olden days, people use to look at insurance as a tool of investment. They use to consider insurance as an investment avenue for post retirement life. Tax benefits on the amount of premimum paid was another attraction. But nowadays, young citizens prefer mutual funds, shares of blue chip companies and other popular avenues of investment. They do not consider insurance as an investment. Their practical approach has made term insurance more popular. The element of contingency in today’s life has attracted new term insurance policies with different riders. They have become popular as purely for protection against uncertainties in life they are opted for. Nowadays, people are inclined towards low cost premiums and huge insurance cover. The basic purpose of this research study is to find out the factors that determine decisions of consumers while purchasing term insurance plans in India. The researcher has taken into account different factors involved in sale of term insurance plans. For the study sample data is collected from the respondents who are decision makers in buying insurance policies. The insured citizens were asked to give rating to various term insurance plans. They were provided with questionnaires on google form. The insurance buyers were selected by using non-probablity judgement sample method. The present research study has revealed the fact that, the important features of term insurance are brand value of the plan and the payment options provided by the insurance company. The secondary and less significant factors governing sale of term insurance are term assured, riders made available and the insurance sales channel.