Analysis of Consumer Purchase Intention of Life Insurance: Bangladesh Perspective

Abstract

Purpose- The purpose of this paper is to investigate the factors affecting customer intention to purchase life insurance. Design/Methodology/Approach- Based on a sample of 200 individuals, this study is basically descriptive in nature and used both primary and secondary sources of data. To investigate the relationship between dependent and independent variables one way ANOVA tests, Correlation and Multiple Regression Analysis were conducted throughout the research. Findings- The paper demonstrates that socio-demographic variables except occupation have no significant influence on purchase intentions for life insurance. The study also demonstrated that bequest motive and financial literacy had the most significant impact on customer purchase intention for life insurance. However, precautionary motive was found to be insignificant in influencing customer interest or intention to purchase Life insurance. Research Limitations- The major limitations of this paper is the small sample size. Additionally, future studies may incorporate some other variables such as religiosity and national culture which were not considered in this study. Practical implications- The paper will be helpful for marketer to gain a better understanding of customer and the factors that make them interested or intended to purchase life insurance in Bangladesh. Originality- It is apparent that there are very few studies that focused on several determinants of life insurance demand and indeed none of them incorporated collectively the factors considered in this study for predicting customer purchase intention for life insurance. In this regard this paper makes significant contribution in satisfying the gap in the scope. Therefore, the authors expects that this paper will provide marketers with a clear understanding of general peoples’ interest in life insurance and the cumulative impact of socio-demographic, financial literacy, saving motives and risk aversion motives on purchase intention for life insurance.

Investigating the Factors of Consumers’ Purchase Intention Towards Life Insurance in Bangladesh: An Application of the Theory of Reasoned Action

“…At a macro-economic level, a positive link has been predicted between risk aversion and insurance consumption of a nation (Hofstede, 1995;Schlesinger, 1981;Szpiro, 1986). Further, it is posited that an individual with a risk aversion motive will always prefer less risk (Ofoghi & Farsangi, 2013;Outreville, 1998), indicating an individual's proclivity towards purchasing insurance (Chiappori & Salanié, 2000;Emamgholipour et al, 2017;Jahan & Sabbir, 2018). In line with this, the following hypothesis is put forward in this study:…”

“…Further, to test the significance of particular psychological and behavioural factors in predicting purchase intention towards life insurance alongside attitude and subjective norms, religiosity, risk aversion motives, and saving motives were included in the classical TRA model. Past studies have reported the robustness of religiosity, risk aversion motives, saving motives, and financial literacy as direct antecedents of life insurance demand (Mahdzan & Victorian, 2013), and purchase intention towards life insurance (Buzatu, 2013;Jahan & Sabbir, 2018) and Islamic life insurance (Zakaria et al, 2016). However, the integration of such factors within the classical TRA model is quite unlike in extant literature.…”

“…In line with this, Huda (2018) posited that creative internal marketing practices, consumer-oriented offerings, and digitalisation of the insurance management system are essential for the sustainable life insurance business in Bangladesh. Furthermore, Jahan and Sabbir (2018) concluded that socio-demographic variables, financial literacy, saving motives, and risk aversion motives are significant variables for understanding consumer purchase intention toward life insurance.…”

“…The survey approach has been followed for collecting primary data (Ranaweera & Neely, 2003). A 5-point Likert type scale (1 = strongly disagree, 2 = disagree, 3 = neither disagree nor agree, 4 = agree, 5 = strongly agree) has been used to measure items of the questionnaire (Jahan & Sabbir, 2018;Mahdzan & Victorian, 2013). Collected data were primarily analysed by descriptive statistics and exploratory factor analysis using SPSS.…”

“…These aspects are quite scarce in the existing literature (Buzatu, 2013). Though few recent studies (Jahan & Sabbir, 2018;Mahdzan & Victorian, 2013;Souiden & Jabeur, 2015;Zakaria et al, 2016) have attempted to abridge this gap, yet it requires further specifications. Thirdly, most of the existing studies have been paying attention to cross-country studies or well-established markets (Hwang & Gao, 2003).…”