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- Title
Determinants of Lapse and Surrender of Life Insurance Policies in India.
- Authors
Kayarthakdka, Vidyavathi; Birau, Ramona; K., Shylaja; B. N., Avinash; Ninulescu, Petre Valeriu
- Abstract
Life insurance is a long-term contract in which company is committed to paying a specified death or maturity benefit provided that the premiums are paid by the insured. However, a policyholder can terminate the policy either through lapse or surrender at any point of time. influence the profitability and liquidity of insurance companies through acquisition cost, loss of income from renewal premiums etc., and hence needs to be controlled and managed carefully. In this research, an effort is made to identify factors leading to lapsation and surrender of life insurance products and statistically assess their importance based on primary data collected from life insurance policy holders. The data and information collected about reasons for lapsing/surrendering a life insurance policy were analysed using Gretl. A logit model was developed to test the marginal effect of various factors having association with the decision to lapse/surrender a life insurance policy. ofLogit model on lapsation have identified age, marriage, loss of job, debt, hospitalization of dependents, agents' poor service and poor return from policy as the drivers of lapsation. Similarly results of logit model on surrender activity has identified marital status, occupation, marriage of self and children, loss of job, debt, children's education, house construction and poor return from policy are the major reasons for surrendering a life insurance policy before the completion of the term.
- Subjects
INDIA; LIFE insurance policies; SURVIVORS' benefits; CHILD marriage; LIFE insurance; DRIVERS' licenses; LOGISTIC regression analysis; INSURANCE companies
- Publication
Revista de Stiinte Politice / Revue des Sciences Politiques, 2023, Issue 80, p147
- ISSN
1584-224X
- Publication type
Article