IIFT International Business and Management Review Journal

Factors Affecting Purchase Behaviour of Life Insurance in Sri Lanka

Samaratunge R. P.¹, Umayangani S. W. P. R.¹, Wijayarathne S. C. D.¹ and Rathnasingha D. L. P. M.¹

First Published 18 Feb 2026. https://doi.org/10.1177/jiift.251414491

Article Information

Corresponding Author:

Rathnasingha D. L. P. M., Department of Finance, Faculty of Management and Finance, University of Colombo, College House, 94 Cumaratunga Munidasa Mawatha, Colombo 00700, Sri Lanka.
Email: prasath@dfn.cmb.ac.lk

¹Department of Finance, Faculty of Management and Finance, University of Colombo, Sri Lanka

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-Non Commercial 4.0 License (http://www.creativecommons.org/licenses/by-nc/4.0/) which permits non-Commercial use, reproduction and distribution of the work without further permission provided the original work is attributed.

Abstract

The life insurance industry is a cornerstone of the Sri Lankan financial system, driving economic growth through capital mobilisation and liquidity creation. Despite its importance, Sri Lanka exhibits a notably low life insurance penetration rate compared to other Asian countries. This study investigates the critical factors influencing the purchase behaviour of life insurance among individuals in Sri Lanka, filling a gap in localised empirical research. The research adopts a quantitative approach, utilising the Theory of Planned Behaviour and the Theory of Reasoned Action as its theoretical framework. Primary data were collected via structured questionnaires from a sample of 391 individuals across all 9 provinces of Sri Lanka. The study examines six independent variables: insurance literacy, attitude, subjective norms, trust, risk perception and perceived behavioural control, with purchase intention serving as the mediating variable. Data analysis was performed using multiple linear regressions and Baron and Kenny’s method to test the mediating impact. The results indicate that all six independent variables significantly influence life insurance purchase behaviour. Furthermore, purchase intention was found to partially mediate the relationship for insurance literacy, attitude, subjective norms and perceived behavioural control, while exerting a full mediation effect for trust and risk perception. The findings suggest that insurance companies and policymakers should prioritise enhancing life insurance literacy and building trust to increase penetration. Tailored marketing strategies focusing on young adults and educated segments are recommended to expand the market reach and strengthen social security in the country.

Keywords

Life insurance, purchase behaviour, purchase intention, mediating impact, Sri Lanka

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Annexure 1: Profile of the Respondents