The Role of Life Insurance in Wealth Creation for Individual Investors in Bangalore

Abstract

Life insurance is growing in recognition as an investment instrument, but awareness of its wealth creation benefits remains limited. This exploratory study investigates individual investors' perceptions and behaviors regarding the use of life insurance for wealth creation in Bangalore through a survey of 385 respondents. Data analysis using ANOVA and SEM revealed prevalent recognition of life insurance's capacity to promote tax-efficient accumulation, systematic savings, and estate planning across gender, age, education, income, and occupation groups. Unit linked insurance plans (ULIPs) were widely viewed as effective investment vehicles suited for financial growth objectives across investor segments. While online insurance elicited neutral satisfaction, enhanced product features, financial education, and managing expectations could potentially improve adoption among digital natives. The findings offer actionable insights for insurers, advisors, and policymakers to boost life insurance uptake for wealth goals through targeted product development, communication strategies, and distribution models tailored for specific demographic and psychographic segments.