Abstract:
Life is full of risks and uncertainties since, people are social human beings, and they have certain responsibilities too to minimize these risks. Sri Lankans are emotional and rational in their buying decisions and they believe in future rather than the present and desire to have a better and secured future. In this direction, life insurance services have their own value in terms of serving as savings, investment and risk protection.
"Life insurance is the business of affecting the contracts of insurance upon human life including any contract whereby the payment of money is assured on death or the happening of any contingency dependent on human life and any contract which is subject to the payment of premiums for a term dependent on human life" (Epetimehin, 2011)
The literature reviewed has shown that life insurance business has a high growth rate in Sri Lanka and on the other hand, relatively low penetration of the sector (Insurance board of Sri Lanka, 2011). It indicates that there is still a considerable unexplored potential. The developments in the finance sector are the main triggers of the expected future purchase (Outreville J.F., 1996) and life insurance companies having a bad reputation in terms of reliability (Oldenboom and Abratt, 2000). The rising customer awareness and aspiration of quality service and availability of alternative service providers in Sri Lankan market has made customers more demanding. The insurance company's ability to attract and retain new customer is a function of not only what it offers but also how it serves its existing customers ((Jha, S.M., 2000). Since, insurance companies are not different from other industrial organizations with respect to selling of their products, i.e., insurance policies; product differentiation can make an impact.
1BSL annual report has shown that Sri Lanka is a country where the average selling or purchase of a life insurance policy is still lower than many other Asian countries. This has led to a considerable unexplored potential of life insurance in Sri Lanka. With so many life insurance products available, one continues to wonder why the majority of Sri Lankan population does not have any life insurance policy.
The objectives of the study were to identify the factors enhancing the purchase of life insurance and to compare the differences in consumer perception of male and female consumers.
