Research Paper Volume 2 Issue 10 June 2015

International Journal of Informative & Futuristic Research ISSN (Online): 2347-1697

A Study On Policyholders Satisfaction

On Service Of LIC: Reference To
Coimbatore District
Paper ID IJIFR/ V2/ E10/ 034 Page No. 3620-3626 Subject Area Management
Key Words Insurance Policies, Satisfaction Level, Policy Holders, Attitude, LIC Services
Received On 05-06-2015 Reviewed On 18-06-2015 Published On 20-06-2015

Head of the Department

1. Dr. A.W .Unas Department of Business Administration
Govt. Arts College, Coimbatore
Associate Professor
Department of Management
2. S. Ram Kumar
Hindustan College Of Arts & Science
Coimbatore-Tamilnadu

Abstract
Generally, people do not have much awareness on insurance policies in the
services rendered by LIC. It is the realization for the need of an insurance policy
after the loss of life and property in an accident. It is commonly held conviction
that insurance is a sheer waste and takes great effort to remove this mind-set
among people. The successes of the insurance companies depend on the awareness
among policyholders about insurance products and satisfaction of the
policyholders regarding services rendered by the insurance company. Customer
satisfaction depends upon how the customer perceives the policies offered by an
insurance company and how they have delighted by its services. By
understanding, customers awareness level about the products, perception about
insurance products, service quality and satisfaction level, the marketing team can
compete with other competitors to retain the existing customers as well as get new
customers. The present study is attempted to know how customers perceive life
insurance products, service quality and satisfaction levels of policy holders of the
Life Insurance Corporation of India.

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Copyright IJIFR 2015 3620
 ISSN (Online): 2347-1697
International Journal of Informative & Futuristic Research (IJIFR)
Volume - 2, Issue - 10, June 2015
22ndEdition, Page No: 3620-3626

1. Introduction
The concept of insurance is that of a contract between two parties, the insurer and the insured,
where the insurer agrees to pay the insured for any financial loss arising out of any unanticipated
events in return for a regular payment of a pre-determined sum of money termed premium. Life
insurance provides both safety and protection to individuals and encourages savings. The insurance
sector is one of the important sectors of the liberalized Indian economy. In India, only less than 20
percent of the total insurable population has covered under various life insurance schemes. Life
Insurance Corporation of India (LIC) was soon challenged. Due to growing pressure, the task of
providing and maintaining higher level of customer satisfaction has become one of the most
important challenges for insurance companies. The LIC continues to be a dominating insurance
company in India and it is moving fast on a new growth path and by improving on its own past
records. The LIC of India has devised several life policies to satisfy the diversified needs and wants
of the customers.

2. Objectives of the study

To analyze the factors that influenced the policyholders to take the policy.
To ascertain the policyholders level of satisfaction relating to services of LIC.

3. Scope of the Study

This study explores to reveal the policyholders level of satisfaction towards services of LIC and their
attitude towards private life insurance companies. This study highlights key areas, which the policy
makers in LIC have to improve their customer satisfaction. The study, analysis, findings, suggestions
and conclusion proposed by the researcher will also be helpful in future studies in the insurance
sector. The significance of this study is that, it brings out the differences in various parameters like
awareness level, service quality and the satisfaction levels of policyholders.

4. Research Methodology
This section includes sampling technique, collection of data, method of analysis and statistical tools used
in the present study.
i. Sample Design
The stratified multistage sampling method is adopted for the present study. Coimbatore district
has been selected by using the random sampling method. the respondents have been selected
based on convenient sampling method. The data have been collected from the 516 policyholders
who are selected by the convenient sampling method.
ii. Collection of Data
The study has been done from large sample of policyholders in Coimbatore District. Survey
method is the best approach for a quantitative research, with the help of a structured interview
schedule. It helps to understand the possible relationships between the data and the unknowns in
the universe. An interview schedule has been used as the instrument for collecting the research
data.
iii. Frame Work of Analysis
The data is first presented in tabular and graphical form representing the different responses given
by the policyholders. Then analysis is done using following statistical tools such as Frequency
Analysis, Chi-square Test, and Garrett Ranking Technique.

Dr. A.W .Unas , S. Ram Kumar: A Study On Policyholders Satisfaction On

Service Of LIC: Reference To Coimbatore District
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 ISSN (Online): 2347-1697
International Journal of Informative & Futuristic Research (IJIFR)
Volume - 2, Issue - 10, June 2015
22ndEdition, Page No: 3620-3626

5. Analysis And Interpretation

5.1 Profile of the Policyholders

Table 1: General Profile of the Policyholders
Factors Classification No of Respondents Percentage
Age Young Age 158 30.6
Middle Age 235 45.5
Elder Age 123 23.8
Gender Male 290 56.2
Female 226 43.8
Marital Status Married 395 76.6
Unmarried 121 23.4
Education qualification Illiterate 56 10.9
School level 118 22.9
Degree Level 176 34.1
Professional 166 32.1
Occupation Employee 315 61.0
Business & Profession 75 14.5
Agriculturist 56 10.9
Others 70 13.6
Income level Low Income Group 205 39.7
Middle Income Group 156 30.2
High Income Group 155 30.0
Family Size Two 130 25.2
Three 253 49.0
Four 133 25.8
Inference
Regarding personal profile of the consumer, the above table shows that 56.2% of the respondents are
male, 45.5% of the respondents are come under Middle age Group, about 76.6% are Married, 34.1%
of the respondents are Degree holders and the maximum respondents are employees (61%), 39.7%
of them are under low income group and regarding the family Size 49% of the respondents come
under three members.

5.2: Level of Satisfaction

Table 2: Level of Satisfaction of Policy Holders Regarding Service
Level of Satisfaction Frequency Percentage in Total
Highly Satisfied 133 25.8
Moderately Satisfied 287 55.6
Low Satisfied 96 18.6
Total 516 100
Inference
Most of the respondents (55.6%) are moderately satisfied with services of LIC in the study area,
about 25.8 percent of the respondents registered their satisfaction at a higher level and remaining
18.6 percent of the respondents expressed low satisfaction levels with LIC services.

Dr. A.W .Unas , S. Ram Kumar: A Study On Policyholders Satisfaction On

Service Of LIC: Reference To Coimbatore District
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 ISSN (Online): 2347-1697
International Journal of Informative & Futuristic Research (IJIFR)
Volume - 2, Issue - 10, June 2015
22ndEdition, Page No: 3620-3626

5.3 Chi Square test

Table 3: Educational Qualification and Level of Satisfaction
Level of Satisfaction
Classification Chi-
Square P
Low Moderate High Total value value
Count 9 25 22 56
% within Row 16.1% 44.6% 39.3% 100%%
Illiterate
% within Column 9.4% 8.7% 16.5% 10.9%

Count 17 81 20 118
School Level % within Row 14.4% 68.6% 16.9% 100%
% within Column 17.7% 28.2% 15.0% 22.9%
Count 31 106 39 176 22.682 0.001
Degree Level % within Row 17.6% 60.2% 22.2% 100%
% within Column 32.3% 36.9% 29.3% 34.1%
Count 39 75 52 166
Professional
% within Row 23.5% 45.2% 31.3% 100%
Course & Others
% within Column 40.6% 26.1% 39.1% 32.2%
Count 96 287 133 516
Total
% within Row 18.6% 55.6% 25.8% 100%
Inference
Researcher framed the hypothesis as there is no significant relationship between educational
qualification of respondents and their level of satisfaction. This hypothesis has been tested with the
help of chi-square test. The calculated value of Chi-Square value is 22.682 and P value is 0.001.
Since the calculated P value is less than 0.05, the null hypothesis has been rejected.

5.4: Occupation and Level of Satisfaction

Table 4: Occupation and Level of Satisfaction
Level of Satisfaction
Classification Chi-
Square P
Low Moderate High Total value value
Count 72 149 94 315
Employee % within Row 22.9% 47.3% 29.8% 100%%
% within Column 75.0% 51.9% 70.7% 61.0%
Count 8 49 18 75
Business &
% within Row 10.7% 65.3% 24.0% 100%
profession
% within Column 8.3% 17.1% 13.5% 14.5%
Count 9 40 7 56
25.737 0.001
Agriculturist % within Row 16.1% 71.4% 12.5% 100%
% within Column 9.4% 13.9% 5.3% 10.9%
Count 7 49 14 70
Others % within Row 10.0% 70.0% 20.0% 100%
% within Column 7.3% 17.1% 10.5% 13.6%
Count 96 287 133 516
Total
% within Row 18.6% 55.6% 25.8% 100%

Dr. A.W .Unas , S. Ram Kumar: A Study On Policyholders Satisfaction On

Service Of LIC: Reference To Coimbatore District
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 ISSN (Online): 2347-1697
International Journal of Informative & Futuristic Research (IJIFR)
Volume - 2, Issue - 10, June 2015
22ndEdition, Page No: 3620-3626

Inference: The researcher framed the hypothesis as There is no significant relationship between
occupation of respondents and their level of satisfaction towards LIC services. The researcher has
tested the hypothesis using the Chi-Square test. The calculated value of Chi-Square value is 25.373
and P value is 0.001. Since the calculated P value is less than 0.05, the null hypothesis has been
rejected.

5.5 Income and Level of Satisfaction

Table 5: Income and Level of Satisfaction
Level of Satisfaction
Chi-
Classification
Square P
Low Moderate High Total value value
Count 29 143 33 205
Low Income
% within Row 14.1% 69.8% 16.1% 100%
Group
% within Column 30.2% 49.8% 24.8% 39.7%
Count 29 85 42 156
Middle Income
% within Row 18.6% 54.5% 26.9% 100%
Group
% within Column 30.2% 29.6% 31.6% 30.2% 36.774 0.001
Count 38 59 58 155
High Income
% within Row 24.5% 38.1% 37.4% 100%
Group
% within Column 39.6% 20.6% 43.6% 30.0%
Count 96 287 133 516
Total
% within Row 18.6% 55.6% 25.8% 100%

Inference
The researcher has framed the hypothesis as there is no significant relationship between income
level of respondents and their level of satisfaction. The hypothesis has been tested with the help of
chi-square test. The calculated value of Chi-Square value is 36.774 and P value is 0.001. Since the
calculated P value is less than 0.05, the null hypothesis has been rejected.

5.6: Factors Adopted By The Respondent In Selecting A Policy

The percentage position of each rank thus obtained is converted into scores by referring to the table
given by Henry Garrett. Then for each factor the scores of individual respondents are added together
and divided by the total number of respondents for whom the scores are added. These mean scores
for all the factors are arranged in the order of their ranks and inferences are drawn.
The Table no. 6 mentioned below highlights Garretts scores which help to decide the most
important factors adopted by the respondent in selecting a policy. The highest score is 67.87, the first
rank for safety, and the lowest rank is 39.71, the last rank selected by the respondent which is loan
facility. It is inferred from this Table that an individual chooses the policy based on his own
perceptions in order to satisfy his/her needs.
Garretts Ranking Technique used
To perform Henry Garretts ranking the following formula has been used.
Percentage position =

Dr. A.W .Unas , S. Ram Kumar: A Study On Policyholders Satisfaction On

Service Of LIC: Reference To Coimbatore District
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 ISSN (Online): 2347-1697
International Journal of Informative & Futuristic Research (IJIFR)
Volume - 2, Issue - 10, June 2015
22ndEdition, Page No: 3620-3626

Rij = Rank given for ith item jth individual

Nj = Number of items ranked by jth individual

Dr. A.W .Unas , S. Ram Kumar: A Study On Policyholders Satisfaction On

Service Of LIC: Reference To Coimbatore District
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 ISSN (Online): 2347-1697
International Journal of Informative & Futuristic Research (IJIFR)
Volume - 2, Issue - 10, June 2015
22ndEdition, Page No: 3620-3626

6. Findings

Most of the respondents (55.6%) are moderately satisfied with services of Life Insurance
Corporation.
There is a significant relationship between educational qualification of respondents and their
level of satisfaction.
There is a significant relationship between occupation of respondents and their level of
satisfaction towards LIC services.
There is a significant relationship between income level of respondents and their level of
satisfaction.
The most important factors adopted by the respondent in selecting a policy. The highest
score is 67.87, the first rank for safety, and the lowest rank is 39.71, the last rank selected by
the respondent which is loan facility. It is inferred from this Table that an individual chooses
the policy based on his own perceptions in order to satisfy his/her needs.

7. Suggestions
The terms and conditions of the product should be transparent to the public.
Researcher suggests to policy makers to give more importance to design core services rather
than allied business services.
Relax the formalities in renewal of lapsed policies.
Periodical review about the service quality required to maintain and improve the service
quality.

8. Conclusion
In India, the opened economic policy for the insurance industry has increased competition for
players in the insurance industry. The oldest and leading public sector insurance companies like LIC
in India are facing very stiff competition from the new players entering the market. In addition, in
case of the insurance sector the reference group plays a vital role. So keeping this aspect in
consideration, leading insurance players should focus on service quality. Service quality can be used
as a strategic tool to get a competitive advantage over challenging insurance providers. LIC should
focus on assurance and tangibility to further strengthen the level of service quality. Life Insurance
Corporation of India competes other players in the market very aggressively, but the low score in the
reliability dimension is a contra indicator.

References
[1] Marketing Management Philip Kotler, Prentce Hall of India Private Limited New Delhi 2000
[2] Marketing Research Malhotra, third edition, Pearson Education.
[3] A Note on the Insurance Status in India for Poor, Aggarwal and Preeti Alliance Journal of Business
Research, 2005
[4] A Study on the Expectations and Perceptions of the Services in Private Life Insurance Companies,
Keerthi, P. and Vijayalakshmi, R SMART Journals, Vol. 5, 2009.
[5] A study on Service Quality Measurement and its Impacts in Opting Insurance Companies
International Journal of Social Science & Interdisciplinary Research, Malini (2012)

Dr. A.W .Unas , S. Ram Kumar: A Study On Policyholders Satisfaction On

Service Of LIC: Reference To Coimbatore District
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