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Influence Of Demographic And Household Factors On Surrender Of Life Insurance Policies In India

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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)

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.

Suggested Citation

  • Vidyavathi Kayarthakdka & Birau Ramona & Savita Sachin Rai & Rajeshwari Puttanna & Ninulescu Petre Valeriu, 2023. "Influence Of Demographic And Household Factors On Surrender Of Life Insurance Policies In India," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 5, pages 31-32, October.
    • Handle: RePEc:cbu:jrnlec:y:2023:v:5:p:21-32
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    References listed on IDEAS

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    1. Weiyu Kuo & Chenghsien Tsai & Wei‐Kuang Chen, 2003. "An Empirical Study on the Lapse Rate: The Cointegration Approach," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 70(3), pages 489-508, September.
    2. David T. Russell & Stephen G. Fier & James M. Carson & Randy E. Dumm, 2013. "An Empirical Analysis of Life Insurance Policy Surrender Activity," Journal of Insurance Issues, Western Risk and Insurance Association, vol. 36(1), pages 35-57.
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