INFLUENCE OF DEMOGRAPHIC AND HOUSEHOLD FACTORS ON SURRENDER OF LIFE INSURANCE POLICIES IN INDIA

Vidyavathi Kayarthakdka, Birau Ramona, Savita Sachin Rai, Rajeshwari Puttanna and Ninulescu Petre Valeriu
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Vidyavathi Kayarthakdka: FACULTY, NITTE INSTITUTE OF PROFESSIONAL EDUCATION, NITTE DEEMED TO BE UNIVERSITY, INDIA
Birau Ramona: FACULTY OF ECONOMIC SCIENCE, UNIVERSITY CONSTANTIN BRANCUSI, TARGU-JIU, ROMANIA
Savita Sachin Rai: MANIPAL INSTITUTE OF MANAGEMENT, INDIA
Rajeshwari Puttanna: FACULTY, SRI SIDDHARTHA INSTITUTE OF MANAGEMENT STUDIES, KARNATAKA, INDIA
Ninulescu Petre Valeriu: UNIVERSITY OF CRAIOVA, DOCTORAL SCHOOL OF ECONOMIC SCIENCES, CRAIOVA, ROMANIA

Annals - Economy Series, 2023, vol. 5, 31-32

Abstract: In this research paper, we examined the influence of demographic and household factors on adecision to surrender a life insurance policy before the end of the policy term. As per thehandbook on Indian Insurance Statistics 2020-21, by the 5 th year of policy sale, only 4 out of 24 life insurers could retain half of their policies. One of the reasons for this low persistenceis the increased surrender of policies. Surrendering a policy means the policyholdercancelling the policy and agreeing to take the cash value/surrender value accrued to thepolicy over time and forgoing the death benefit or maturity benefit. Generally, a policyacquires surrender value after the policyholder has paid the premiums continuously for threeyears. A survey of randomly selected 537 policyholders was conducted using a structuredquestionnaire to examine the influence of demographic and household factors on a decisionto surrender a life insurance policy. Results of our study suggest that demographic andhousehold factors influence the decision to surrender a life insurance policy. Marital statusand occupation are statistically significant predictors of the decision to surrender a policy.

Keywords: life insurance; policy holder; surrender; persistency; maturity; lapsation; logit model (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:cbu:jrnlec:y:2023:v:5:p:21-32

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