Development of insurance literacy construct in modeling life insurance ownership and lapse determinants: A descriptive analysis

• Published in: AIP Conference Proceedings
• Main Author: Shamsuddin S.N.; Ismail N.; Roslan N.F.
• Format: Conference paper
• Language: English
• Published: American Institute of Physics 2024
• Online Access: https://www.scopus.com/inward/record.uri?eid=2-s2.0-85204950131&doi=10.1063%2f5.0227973&partnerID=40&md5=2fc55419c92888a6bf6c4c95cf6e0a64

The sustainability and well-being of families' finances have been shown to be significantly impacted by financial illiteracy and underinsurance. Notwithstanding, studies show that obtaining a more specialized education helps improve insurance literacy and that not all people who are financially literate are also knowledgeable about insurance. The effect of insurance literacy on the propensity to purchase and maintain insurance is little understood. In light of this gap, our work aims to analyze the profile of Malaysian consumers' insurance literacy on buying decisions of life insurance descriptively and to show that there is a significant difference between those who have lapsed and have not lapsed the policy in terms of insurance literacy. The study sample consists of Malaysian aged 18 to 64 who have purchased and owned life insurance, collected through questionnaires. The studied constructs are insurance literacy, trustfulness, perceived product benefits, perceived product risks, attitudes toward insurance, and intention to purchase insurance. The expected result is insurance literacy, trust, and perceived insurance value will show a significant difference between people who have and have not let their insurance lapse. Its findings would be relevant to academics and policymakers encouraging life insurance to achieve financial stability and well-being. © 2024 Author(s).