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Asian Journal of Management
Year : 2018, Volume : 9, Issue : 4
First page : ( 1281) Last page : ( 1284)
Print ISSN : 0976-495X. Online ISSN : 2321-5763.
Article DOI : 10.5958/2321-5763.2018.00203.2

Business Obligation of Life Insurance Companies to the Rural Sector-A Study

Dr. Rao S. Kamaleshwar1, Rao K. Hanumantha2,*

1Professor, Department of Commerce and Business Management, Kakatiya University, Warangal, Telangana

2Research Scholar, Department of Commerce and Business Management, Kakatiya University, Warangal, Telangana

*Corresponding Author E-mail: hanumakondamudi@gmail.com

Online published on 30 January, 2019.


The Indian life insurance sector was the tenth largest life insurance market in the world and the fifth largest in Asia in terms of total premiums in 2016. Life insurance is bought lesser in India by rural population. The tendency is to defer the purchase decision. The possibility of death is ignored by the rural people; however there is more possibility of such misfortune for people living in rural areas. The rural people never believe that they can succumb to destiny and they think they will live a long and healthy life. The rural population in India is without life insurance cover and this part of the population is also subject to weak social security and pension systems with hardly any old age income security. Every insurer has to follow the rules regarding rural and social obligations from time to time. The present study is to examine the business done in the rural sector by the life insurance companies. LIC, SBI Life Insurance Co. Ltd and ICICI Pru Life Co. Ltd and Private Sector on the whole have been taken for the study. It has been found that all the three companies and the private sector on whole have maintained the required percentage of policies to be issued in rural areas of their respective businesses during the study period. Not even two percent of the rural population has been covered in any of the years under study. The reasons might be due to lack and low awareness of the people about life insurance, low affordability and low purchasing power. These can be trounced by using social media, TV and radio, campaigns and developing trust among the rural people by providing quality service.



Rural Sector, population, GDP, insurance penetration, micro insurance.


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