An Investigation of The Perception of Households on Benefit Options of The Insurance Retirement Plans in Sri Lanka- A Case Study of Gampaha District
Demographic Ageing is one of the greatest challenges faced by Sri Lankan society due to rapid increase in the proportion of the elderly population aged 60 years and above during last few decades. Demographic ageing creates social and economic implications at individual, family and societal levels. The major risk associated with old age is the insufficient of income during the retirement age.
Insurance retirement plans provide financial support along with the protection of the family and health care during the period of inability to work due to old age. However, it was observed that, purchasing the insurance retirement plans by the households in Sri Lanka is substantially very low. Accordingly the research problem of this study includes; why the households do not purchase retirement plans offered by the insurance companies in Sri Lanka to cover the risk of loss of income during their retirement life. The main objective of this study is to identify the gap between the benefit options of retirement plans offered by the insurance companies in Sri Lanka and the expected benefit options of insurance retirement plans by the households in Sri Lanka. The specific objectives of this study include; to examine the demand for retirement plans offered by the insurance companies in Sri Lanka and to identify the households’ expectation from the retirement plans offered by the insurance companies in Sri Lanka.
A survey based descriptive research design was applied and the data was collected from the samples of 200 households from Gampaha District and 25 managers from top five insurance companies in Sri Lanka. Quantitative data collected from the households based on Likert’s Scale was analyzed using descriptive statistics and the hypotheses were tested using t-test and chi-square test. Data collected from the managers of 5 insurance companies were analyzed using qualitative technique. Results revealed that, vast majority of the household most prefer to purchase retirement plans offered by the insurance companies in Sri Lanka if they provide annually increasing lifetime pension benefits. However, retirement plans of the insurance companies in Sri Lanka offer monthly pension only for a certain period of time. Accordingly it was revealed that, there is a huge gap between the expected benefit by the households and the benefits offered by the insurance companies in Sri Lanka. Future researches could be based on identifying the problems and prospects of insurance retirement plans in Sri Lanka.
Keywords— Demographic ageing, insurance companies, retirement plans, benefit options.