Psychological Determinants Influencing Funeral Insurance Avoidance Among Indian Consumers

Abstract

In India, the funeral insurance is one of the least used financial products, even though the country has a developing insurance market. This paper examines the psychological factors that can help determine the avoidance of funeral insurance amongst the Indian consumers. Primary data collection was done through the application of the quantitative research design on 206 respondents through a structured Likert-scale questionnaire. The research used Multiple Linear Regression (MLR) to investigate the effect of five independent variables on Funeral Insurance Avoidance (FIA) which were Death Anxiety (DA), Cultural Norms (CN), Financial Literacy (FL), Risk Perception (RP), and Attitude toward Insurance (AT). The general regression equation was statistically significant, (F = 23.989, p 0.001) with a variance of 37.5% in the avoidance behavior(R 2 = 0.375). There was support of all the five hypotheses with Death Anxiety coming out the best predictor (β = 0.240, p < 0.001). The results indicate that avoidance of funeral insurance is a multi-dimensional phenomenon, which is caused by emotional, cultural, and cognitive causes, but not simply by financial reasons. Insurance, financial educators and policymakers are discussed as having practical implications.