Page 1 of 15
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 03 Issue 08
July 2017
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 206
Determinants of Life Insurance Demand in Sylhet City
Mohammad Kamrul Ahsan & Fahmida Rahman
1Assistant Professor Department of Business Administration Metropolitan University, Sylhet,
Bangladesh
E-Mail: ahsan404243@gmail.com
2Research Fellow Institute of Education and Research (IER) University of Rajshahi,
Rajshahi-6205, Bangladesh
Email: fahmida_bipasha@yahoo.com
Abstract
In this study, the researchers investigate
the determinants of demand for life
insurance in Sylhet City in Bangladesh.
The researchers have found twenty
determinants of demand for life insurance
in Sylhet City, which is expressed by
75.1% of life insurance demand. The most
important determinant is ‘Guaranteeing
money related prosperity of claim family
in case of death’. The researchers use
descriptive statistics, multiple regression
analysis, and ANOVA to analyze the
collected data. The SPSS 11.5 is used to
conduct these analyses.
Keywords: Life, Insurance, and Demand
INTRODUCTION
The Life Insurance gives the double
advantages of reserve funds and security.
Life coverage as a key segment whose
commitment to the advancement of the
economy can't be over-accentuated
(Mishra, 2004). In a nation where many
individuals live beneath destitution line, it
is troublesome for individuals to consider
future security. Many individuals contend
that the future will deal with itself. Lіfе
іnsurаnсе dеmаnd hаs ехреrіеnсеd а rаріd
grоwth оvеr thе lаst fеw dесаdеs, bоth аs
thе рrоvіdеr оf fіnаnсіаl sеrvісеs tо
соnsumеrs аnd аs а mајоr іnvеstоr іn thе
саріtаl mаrkеt. Вut, thе grоwth оf lіfе
іnsurаnсе dіd nоt rаіsе оn thе sаmе lеvеl,
nоt оnlу аmоng іndustrіаl соuntrіеs аnd
dеvеlоріng соuntrіеs, yet аlsо thеrе іs а
dіffеrеnсе bеtwееn dеvеlоріng соuntrіеs
(Kjosevski, 2012). Insurance agencies are
moderate in settling claims. At the point
when a protected occasion happens,
Insurance organizations have been
moderate in handling claims. This has
dissolved the certainty clients have on
protection prompting the moderate
development of the business. General
client benefit has been poor in the
business. The discoveries of this
Page 2 of 15
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 03 Issue 08
July 2017
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 207
exploration demonstrate that the extra
security buy is controlled by age, work,
and capability while sexual orientation,
conjugal status, and the number of
relatives don't indicate factually critical
impact. As indicated by the creator's best
information, this is the principal paper that
explores elements of life coverage request
in Sylhet City. Also, the paper adds to the
writing on life coverage determinants in
developing markets.
OBJECTIVES
1. To recognize the determinants of the life
Insurance.
2. To gauge the degree of the critical
determinants on life coverage requests.
LIMITATIONS
Relevant data are required to make any
paper successful and meaningful. It was
hard to talk with respondent due to time
limitations that eventually limit the paper
in the relation of the world. Collecting the
primary data was very rough and tough
because most of the respondent was not
agree to talk frequently rather they were
hesitating while making the survey and it
was found that the wants vary from
respondent to respondent, so decision
making was so tough. The research might
not be generalized because of the fact that
the respondents were drawn from Sylhet
City. Thus the findings may not be a true
representation of whole Bangladesh. Not
all respondents were committal to the
questions asked especially on some
sensitive issues which for one reason or
another they were not willing to disclose
some information.
METHODS
The essential research attempted was
exploratory in nature. The information was
gathered using polls circulated to 60
respondents yet just aggregate 49 surveys
were discovered fit and taken for
examination. The example for the review
comprised of policyholders of both private
and open extra security organizations
working in Sylhet City. The objective
respondents were the general population
owning an extra security approach (with
either people in general or a private life
coverage organization) as they enter chiefs
in their individual family units and have a
personal stake in ventures for duty
arranging, riches creation or staying away
from the hazard. For having some
literature reviews and the
straightforwardness of this research paper,
the researchers have selected twenty
variables as independent and one as the
dependent variable. The researchers have
Page 3 of 15
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
ISSN: 2395-0463
Volume 03 Issue 08
July 2017
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 208
used descriptive statistics, multiple
regression analysis, and ANOVA to
analyze the collected data with the help of
SPSS 11.5 Software.
HYPOTHESIS
These selected determinants have a
positive impact to create life insurance
demand in the Sylhet City.
LITERATURE REVIEWS
Yaari (1965) was the first to develop a
theoretical model to explain the demand
for life insurance. He developed the life- cycle utility model of a consumer together
with reducing the optimal consumption
and optimal saving plans of a consumer.
The consumer maximizes lifetime utility
subject to a vector of interest rates and a
vector of prices including insurance
premium rates. This model posits the
demand for life insurance to be a function
of wealth, expected income over an
individual's lifetime, the level of interest
rates, the cost of life insurance policies
(administrative costs), and the assumed
subjective discount rate for current over
future consumption.
Kjosevski (2012) explained that life
insurance consumption, however, is not
only driven by consumer demand. Price is
undoubtedly an important determinant in
the consumption of life insurance. Varying
levels of urbanization, monetary stability,
bureaucratic quality, rule of law,
corruption, and banking sector
development all impact the insurer's ability
to provide cost-effective insurance. Within
the Lewis model, described above, these
supply-side factors might be represented
by the policy loading factor.
Mantise & Farmer (1968) showed that
marriages, births, personal income,
population size, relative price index, and
employment could affect the insurance
purchase, many studies have been
conducted to estimate the demand for
insurance or to test risk-aversion.
Fortune (1973) studies the determinants of
life insurance consumption by using
multiple regression analysis for the period
between 1964 and 1971. Because of
numerous relapse examinations, non- human riches held wages markdown rate
and purchase certainty factors are
discovered huge. While non-human wealth
held affects life insurance consumption in
a negative way, wages and discount rate
affect in a positive way.
Goldsmith (1983) in the paper developed
and investigated the relationship between a
