Empirical Study of Demographic Inequalities in Indian Life Insurance Industry

Even after more than one and half decade of privatization and insurance sector reforms, out of the total 650 districts in India 34 districts still have no life insurance offices till now (IRDA report 2016–17), it is the significant inequality in terms of geographical location. Life insurance provides financial security in case of sudden loss of income due to some unforeseen accident. Although it’s the basic need of the society but still life insurance penetration and density is dropping in India since the year 2010. Major cause behind such drop in life insurance penetration is prevailing inequalities in the life insurance based on customer’s gender, age, income, occupation, education and residential status. This research paper has the purpose to understand the prevailing inequalities present in Indian life insurance industry based on customer’s demographics. Survey of 502 customers is done in the city of Lucknow. Questions were asked related to demographic profile and the possession (either customer has the life insurance or is likely to buy it in near future) of life insurance policy with customers. Data is collected and analyzed using SPSS. It’s found that 21% households had no life insurance policy. Possession of life insurance policy is found to be significantly varying with respect to customer’s age, income, occupation and residential status. Finding reveals that policy- makers must design the products and policies based on the customer’s demographic which plays a significant role in this service driven Industry.