Determinants of lapsation of life insurance policies: an empirical investigation for the Indian market
by Sunita Mall; Seshadev Sahoo
International Journal of Financial Services Management (IJFSM), Vol. 8, No. 2, 2015

Abstract: In this paper, we study the impact of product and policyholder characteristics on lapsation of life insurance policies. We take the data on lapsation for life insurance product categories including 'Traditional' and 'Unit-linked' products for an investor database of 2967 contracts during the period 2008-2011. We extend existing literature by considering some new explanatory variables related to product and policyholder characteristics like dependency, occupation, gender, education, marital status and outstanding premium. Using logistic regression model, we investigate lapsation rates in Indian life insurance business. We find that product characteristics i.e. sum insured, product type, outstanding premium, mode of payment, policy duration, and outstanding policy duration, and policyholder characteristics, like age of the policyholder, occupation, dependency, and marital status, are significant determinants of lapsation. This paper displays a better depiction of the lapse drivers and will help insurance companies and other intermediaries to understand lapsation.

Online publication date: Wed, 13-Jan-2016

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Financial Services Management (IJFSM):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com