Buying Factors of Life Insurance Policies in Bangladesh

Abstract

This paper attempts to identify the factors responsible for buying life insurance policies by the people of Bangladesh. The purpose of the paper could be attributed by the very low per capita life insurance policy, which is lower in compared to other developing countries of the world. To conduct the study, 300 persons were surveyed from the insurance policyholders, insurance officials, insurance agents, and insurance experts. The policyholders were selected from government and non-government life insurance companies. Among them, the only government life insurance company named Jibon Bima Corporation and three leading private life insurance companies including Delta Life, National Life, and American Life Insurance Companies were included in the survey. These 4 life companies occupy about 80% of the total life insurance market. To analyze data, both descriptive and inferential statistical tools were used. This study identified buying factors using Multivariate Analytical Technique such as, Factor Analysis. The results show that there are 14 buying factors responsible for not buying life insurance policies by the people of Bangladesh. The most important factor is difficulty in continuation of insurance policy in the long run. The reason is attributed by the financial insolvency of the people. The second important buying factor is 'after maturity service' followed by general belief of the people, family plan, controversial idea, government policy, behavior of the insurance agents, awareness of the people, income of the household, attachment with insurance, peer group influence, occupational risk, age of the potential insured, and lack of insurance information. The financial inability may not be changed overnight, however, the after maturity services could be improved by the life insurance companies. The major concern of the life insurance policyholders is related to the claim settlement procedures of the insurer companies. Most often the policyholders have to take pains to get back insured amount from the company. The insurance company should extend their best possible services from the starting of the policy till to the maturity and settlement of the claims.