Role of Information Sources in Selection of Life Insurance Schemes:An Empirical Study of Policyholders

Empirical financial research treats sources of information as an important determinant for selection or purchase of financial services. Sources of information provide information for other selection factors and themselves acts as selection factors also. However the academic literature is very scanty with respect to insurance purchase or selection. This study presents the components of sources of information, which act as selection criteria for purchase of insurance. Primary data collected from 500 respondents, randomly selected from the cities under survey was used to assess the sources of information. Factor analytic technique using varimax rotation procedure resulted in three components namely: ‘Literature and advertising’; ‘Professional recommendations’; and ‘Return performance’. Inferential statistics on Anderson Rubin (AR) factor scores depict the significant differences between various categories, grouped on the basis of demographic, economic and behavioral characteristics. The study adds to the existing literature of life insurance selection and will be of help in improving the marketing strategies of life insurance companies.