LBEF RESEARCH JOURNAL OF SCIENCE, TECHNOLOGY AND MANAGEMENT

Author(s):Sujal Malla, Dr. Sandeep Kautish

Abstract:Life insurance is one of the tools for risk mitigation for the financial loss that might occur after the death of the bread winner. In a developing country like Nepal where the major source of income of the people is remittance from abroad and tourism, the coverage of life insurance is mostly focused on the urban areas. This research has tried to examine the determinants of life insurance within Kathmandu Valley. For this research factors such as financial literacy, tax saving, risk perception and pandemic situation have been considered. This research has been done using primary data collected from various locations within Kathmandu Valley. The data collected has then been further refined to fit the analysis criteria i.e. people aged between 25 to 55 years and analyzed using Pearson’s Correlation and Regression analysis to give a clear picture about the life insurance consumption within Kathmandu Valley. The data analysis shows that females are hesitant to purchase life insurance then men. Further people generating higher level of income do not prefer life insurance as they have enough surplus amount to cover the financial loss when the breadwinner dies. However, in case of lower level of income they have other financial emergencies and cannot afford life insurance. The research concludes that all the determinants used have a positive relationship with the life insurance purchase decision however there is still room for improving the consumption of life insurance by conducting proper awareness of tax saving incentive available on payment of life insurance premium.

Keywords -Life insurance, Theory of decreasing responsibility, Tax saving incentive, Pandemic situation, Risk, Insurance purchase