STUDENTS’ AWARENESS ON THE LIFE AND HEALTH INSURANCES:

FRAMEWORK FOR INSURANCE LITERACY

CHAPTER I

THE PROBLEM AND ITS BACKGROUND

Introduction

Due to the global COVID-19 pandemic, individuals worldwide, including those in

the Philippines, have been rushing to obtain health and life insurance to safeguard

themselves and their families. There has been a significant increase of 30-40% in health

insurance purchases since the onset of the pandemic (Insular Life, 2021). However, there

are many Filipinos who mistakenly believe that life and health insurances are only for the

wealthy or too complex to understand. In reality, there are budget-friendly alternatives

available that offer sufficient coverage (Allianz PNB Life, 2023).

Life insurance offers peace of mind by ensuring financial security for loved ones in

the event of an unexpected death, acting as a vital safety net to protect dependents from

financial hardships (Western & Southern Financial Group, 2023). Health insurance

preserves overall well-being by granting access to quality healthcare without the burden of

high costs, promoting physical well-being, financial stability, and emphasizing preventive

care for healthier lives (HealthCare.gov, 2023).

Essentially, life and health insurance go beyond just being financial tools; they are

essential parts of a holistic approach to well-being. They provide people and families with

the tools to face life’s uncertainties with confidence and strength, creating a feeling of

safety that goes beyond just money matters.

Many people do not know the importance of personal insurance and the cost of

insurance premiums, so they do not use it. This lack of awareness often results in
individuals not getting the insurance coverage they may actually need. To address this

issue, insurance literacy has emerged as a valuable tool in raising awareness about

insurance and its significance. Insurance literacy encompasses knowledge, cognitive

abilities, attitudes, and behaviors related to insurance, along with external factors that

support informed decision-making (Dewi, 2023).

In simple terms, insurance literacy is like a helpful guide that gives people the

knowledge and confidence to make smart decisions about their insurance. It helps by

making sure you really understand how insurance works and encourages careful thinking,

making it a key factor for making smart money plans and managing risks wisely.

While the broader population is gradually becoming more conscious of the need for

insurance, students stand out as a really important group to focus on when it comes to

teaching about insurance. Students are in a key stage of life where they are starting to

handle their own money choices and building the groundwork for their future. Making sure

they understand life and health insurances concepts can give them the knowledge to make

smart decisions about their financial well-being.

Students who have a solid understanding of insurance principles are better equipped

to plan for their future, mitigate financial risks, and safeguard their families in the long

run.. Additionally, teaching students about insurance can create a positive impact, affecting

their families and communities. By making insurance education a priority for students, this

not just helps them personally, but also encourages a culture of being responsible with

money and being ready for the future in the society.

 The main goal of this study is to statistically assess students’ understanding of life

and health insurances concepts and identify ways to improve their awareness of insurance

benefits.

Significance of the Study

The relevance of the study would be beneficial to the following:

Students. This study holds significant value for current students in the field of

Business Administration and Accountancy. It offers them an opportunity to acquire fresh

knowledge about the advantages of life and health insurance. By doing so, it expands their

understanding of the crucial role insurance plays in effective financial risk management.

Professors. Professors can use the findings of this research as a teaching resource

to make their courses more relevant and engaging. It can serve as a case study or reference

material to illustrate the practical applications of concepts taught in the classroom.

Financial Advisors. Financial advisors and professionals in the insurance industry

can better understand the perspectives and needs of students in these fields, enabling them

to tailor their services and advice to this demographic more effectively.

Insurance Companies. Insurance companies can gain valuable market insights by

understanding the perspectives and preferences of potential future customers who are

studying in related fields. The findings can assist insurance companies in designing

targeted outreach programs to engage and educate students about the benefits of insurance,

potentially increasing their customer base.

Future Researchers. The results of this study can serve as a foundation for future

researchers who intend to explore similar topics. It would offer a reliable reference point

and serve as a basis for designing and conducting their own studies.
Review of Related Literature and Studies

The related literature and studies are reviewed by the researchers to provide

background and support for this study. The review is structured into distinct sections, each

dedicated to discussing the intricacies of perceived awareness of life and health insurances,

life insurance, health insurance, and insurance literacy.

Awareness About Life and Health Insurances

The level of awareness about insurance is influenced by several factors, including

an individual’s financial literacy, their personal perception, and their sense of control over

their own life. Mochamad’s study, conducted in the Surabaya and Sidoarjo regions, yielded

some interesting findings. The analysis of the data from the study revealed that financial

literacy has a significant and positive impact on an individual’s awareness of life insurance.

Additionally, an individual’s perception also plays a significant and positive role in shaping

their awareness of life insurance (Prastiawan, 2018).

One of the key factors promoting the expansion of insurance penetration is

awareness. Product awareness entails individuals showing a passive engagement and

increased interest in a particular insurance product. Awareness has been identified as the

primary driver of insurance penetration. While there has been a growing body of literature

focusing on the intricacies of awareness in the insurance domain in recent years, it remains

somewhat fragmented, with no comprehensive systematic review conducted on the subject.

The absence of a systematic review on insurance awareness could be considered a gap

(Ismail et al., 2018).

Many Filipinos perceive life insurance not only as a means of protection but also

as a form of savings or investment due to the cash value it offers, which can be utilized for

loans or as collateral. This makes life insurance an appealing choice for long-term wealth

accumulation. Conversely, annuities serve as a reliable income source for retirees,

particularly in a country with limited social security benefits. By providing regular

payments throughout the annuitant’s lifetime, annuities help mitigate the risk of depleting

savings in old age.

The COVID-19 pandemic is also one of the drivers of this mindset shift that

resulted in an increased interest in life insurance and annuities in the country. The pandemic

has highlighted the need for financial protection in the face of unexpected events. Many

Filipinos are now more aware of the importance of having a safety net to protect their

families and loved ones in the event of untoward incidents (KPMG, 2023).

The influence of peers and family on how individuals perceive life insurance is

significant. Therefore, it is crucial for insurance companies to invest in the training and

development of their staff and agents, as well as to enhance the quality of both pre- and

post-claim services. It becomes imperative for life insurance providers to prevent their

clients from encountering negative experiences when seeking services, as such negative

incidents tend to reinforce and spread through word-of-mouth to peers and family

members. Conversely, when clients have positive experiences, particularly when making a

claim, they are more likely to share positive feedback with others. This positive word-of-

mouth can improve the overall public perception of life insurance and potentially
encourage more individuals to consider purchasing life insurance policies (Lim et al.,

2020).

The majority of customers hold a favorable view of the products and services

provided by the Life Insurance Corporation (LIC). The underlying motivation behind this

research on perceptions of LIC revolves around a keen interest in examining the marketing

aspects of various LIC products. This study also delves into the affordability and the

enduring appeal of LIC’s life insurance policies among the general public. In essence, this

project identifies life insurance products as a substantial avenue for investment and a

valuable opportunity for the general public to enhance their financial saving habits

(Mathew and James, 2021).

There is a need to enhance the awareness level concerning health insurance.

Implementing effective information, education, and communication initiatives can enhance

people’s comprehension of insurance. Researchers also mentioned that it is vital to

understand public perceptions and design a health insurance plan that is accessible,

available, affordable, and acceptable to everyone in society. Given that everyone

experiences health issues or diseases at some point in their lives, acquiring health insurance

is a necessity for future security, as it eases the financial burden of high medical expenses

(Yadav et al, 2018).

It became evident that the majority of young individuals are well-informed about

the benefits, costs, reasons, and coverage provided by health insurance policies. A minimal

proportion of the population displayed a lack of awareness concerning the processes and

expenses involved. The study suggests that young people have gained substantial

knowledge about the healthcare industry and health insurance policies largely due to recent
pandemic events and the promotional efforts of marketers in this field (Khan Y and

Srinivas Rao, 2022).

The concept of health insurance isn’t novel in Nepal, with the first health insurance

program initiated as the “Lalitpur Medical Insurance Scheme” by the United Mission to

Nepal back in 1976. Subsequently, in 2000, the BP Koirala Institute of Health Sciences

(BPKIHS) in Dharan introduced a health insurance program covering both urban and rural

populations. This program offered the same benefits but with varying premium rates. It

encompassed various sectors, including organized ones like cooperatives and business

groups, as well as unorganized groups like farmers and self-employed individuals. In the

absence of a universal government health insurance system, several health insurance

initiatives emerged in rural and semi-urban areas, primarily led by non-insurance

organizations. These initiatives, however, come with certain limitations, including non-

supportive actuarial pricing for the products, a lack of reinsurance backing, and

sustainability concerns (Ghimire, 2018).

In the Philippines, there are significant health problems related to unequal access

to healthcare, health disparities, and a lack of awareness about social health insurance.

Unlike some other countries that prioritize making sure people comprehend their health

insurance rights and use different methods to raise public awareness in covered

communities, the Philippines has not made sufficient efforts to address the issue of social

health insurance awareness (Sosa et al., 2021).

Prior studies have indicated that people’s willingness to embrace new financial

technology is tied to their perception of the benefits it offers to customers. In simpler terms,

if someone believes they will gain more value from a new digital tool, they are likely to
adopt it. The decision to adopt these new technologies is also influenced by how individuals

perceive the trade-offs or sacrifices involved. In essence, those who opt not to use tracking-

based insurance apps see this technology as not providing added value compared to

traditional methods, and they may associate it with changes and uncertainties that they

would rather avoid. Despite the significance of this phenomenon, most research on how

value perceptions affect the adoption of digital applications has centered on the banking

sector. In the insurance industry, our understanding of this aspect remains limited (Talonen,

2021).

Essentially, awareness and perception play pivotal roles in the adoption of

insurance products, both in the realms of life and health insurances. Financial literacy,

personal perception, and a sense of control over one’s life are key factors influencing

individuals’ awareness of insurance, as highlighted by Prastiawan’s study. The COVID-19

pandemic has further underscored the importance of insurance, leading to an increased

interest in both life and health coverage, particularly in the Philippines. Positive

experiences and word-of-mouth recommendations from peers and family members can

significantly impact public perception, thus emphasizing the need for quality service in the

insurance industry. Health insurance awareness remains a concern in various regions, with

studies suggesting the necessity of effective information and education campaigns. Overall,

these findings shed light on the complex interplay of awareness and perception in the

insurance landscape, urging further exploration, particularly in the context of digital

insurance applications.

Life Insurance
 Life insurance is an agreement between an individual, known as the policyholder,

and a life insurance company. In this arrangement, the life insurance policy ensures that

the insurer will provide a designated sum of money to specific beneficiaries upon the death

of the insured individual, in return for regular premium payments made by the policyholder

throughout their lifetime.

A life insurance policy consists of several key elements, with the central

components being the death benefit and the premium. The death benefit, also known as the

face value, is the amount the insurance company guarantees to pay to the policy’s

beneficiaries upon the insured person’s death. The policyholder, often a parent, selects the

desired death benefit based on the anticipated financial needs of the beneficiaries, typically

their children. To determine eligibility for coverage, the insurance company assesses

factors such as the insured’s age, health, and involvement in high-risk activities.

Premiums, on the other hand, represent the payments made by the policyholder to

maintain the insurance coverage. The insurer commits to pay the death benefit if the

policyholder fulfills the premium payments as required. Premium amounts are influenced

by various factors, including the insured’s life expectancy, which hinges on age, gender,

medical history, occupation, and hobbies. Additionally, a portion of the premium covers

the insurance company’s operational expenses. Premiums tend to be higher for policies

with larger death benefits, individuals at higher risk, and permanent policies that accrue

cash value.

In the case of permanent life insurance, a unique component is the cash value,

which serves a dual purpose. Firstly, it acts as a savings account that the policyholder can
access during the insured’s lifetime, with the cash accumulating on a tax-deferred basis.

However, certain restrictions may apply to withdrawals, such as taking out a loan against

the policy’s cash value, which incurs interest. The policyholder can also utilize the cash

value to cover premiums or purchase additional insurance. Importantly, the cash value

remains with the insurance company upon the insured’s death, and any outstanding loans

against it will reduce the policy’s death benefit (Fontinelle, 2023).

It is essential for life insurers to ensure client pleasure, spread more information,

and grow in today’s competitive market. An awareness, a focus on creative items that

address needs, and cheap pricing. This would enable everyone to access the advantages of

insurance and safeguard their lives from potential dangers and uncertainties. Life insurance

was previously used.

As a mechanism to safeguard family income in the event of the death of the head of

the home, especially for young families who are in the income-saving phase. However, life

insurance is increasingly utilized for a variety of different purposes, such as asset

preservation and tax reduction. Whether a person needs life insurance or not simply relies

on his needs.

Life insurance is typically regarded as a means to protect one’s family from the

unexpected event of a primary income earner’s passing. It offers a sense of assurance and

security to the insured individual in the event of an unfortunate incident. Each person’s life

carries economic value based on their current earnings and future income potential. Life

insurance is viewed as a mechanism through which an individual can extend their financial

support to their loved ones even after their demise, ensuring a continuous income beyond

their lifetime (Kumar and Tripathi, 2020).

 The primary factor determining whether an uninsured household will acquire life

insurance or an insured household will terminate their life insurance coverage is the

financial well-being of the household. This is determined through various independent

variables, including the household’s socioeconomic category, reported income, percentage

change in household income, and reported consumption expenditure. The researcher

observed a mix of positive and negative effects, corresponding to improvements or

deteriorations in financial conditions, in both urban and rural households. This observation

aligns with findings from numerous studies conducted in both developed and developing

nations.

An increase in family size has a positive impact on the likelihood of purchasing life

insurance but a negative effect on the probability of discontinuing it. However, there is a

negative correlation between the size of the household and the amount spent on insurance,

suggesting that larger households may find it less affordable. Households led by women

are less inclined to purchase life insurance compared to those led by men, and the

expenditure on insurance is also lower when a woman is the household head. Education

has a positive influence on the purchase of life insurance in both rural and urban

households, while the age of the household head impacts life insurance acquisition in rural

households but not in urban ones (Giri, 2018).

Life insurance functions as a contractual agreement in which the insurer commits

to providing a specified sum of money to either the insured person or their designated

beneficiaries under specific conditions. These conditions typically involve the insured

person’s passing away within a predetermined period or reaching the end of the specified

term within the contract.

 The life insurance system is structured around this contractual framework, aiming

to provide financial protection to the policyholder and their family against various risks,

including the unfortunate events of the insured person’s death or disability. Should any of

these risks materialize, the agreed-upon sum, as outlined in the contract, is disbursed to the

designated beneficiaries. This financial security, however, comes with the responsibility of

the policyholder to make regular premium payments, with the premium amount calculated

based on the coverage level.

Life insurance functions as a financial instrument with the potential to aid

individuals in attaining diverse financial objectives. It operates as a contractual

arrangement between an insurance firm and a policyholder, furnishing financial security

wherein the insurance company undertakes to deliver a predetermined sum to the

designated recipient in the regrettable circumstance of the insured individual’s demise

during the life insurance policy’s duration (Parvathy and Rajalakshmi, 2021)

Life and health insurances in the Philippines have evolved and expanded in recent

years to meet the diverse needs of the population. It is important for individuals and

families in the Philippines to assess their specific insurance needs and consider factors such

as age, health, financial goals, and family circumstances when choosing life and health

insurance coverage. Additionally, understanding the terms and conditions of insurance

policies and comparing offerings from different providers can help individuals make

informed decisions about their insurance coverage (Kwik.insure, 2021).

Term Life Insurance. This simple form of life insurance is the easiest to obtain,

providing beneficiaries with the benefit upon the policyholder’s death. It is characterized

by low premium requirements, making it an attractive choice for individuals who require
insurance but may find whole life or endowment policies financially challenging. However,

there are no benefits if the policyholder outlives the predetermined term period.

Additionally, premiums typically increase upon the renewal of terms, representing a

potential drawback for policyholders.

Whole Life Insurance. A comprehensive type of life insurance that ensures

coverage for the entirety of the policyholder’s life or until they reach 100 years old. It

functions as both a protective measure and a savings tool, as a portion of the premium is

directed towards accumulating cash values over time. The advantages of whole life

insurance include the provision of permanent protection throughout the policyholder’s

entire life or up to the age of 100. It offers flexibility in premium payments and maintains

fixed premiums, providing a sense of financial stability. Additionally, whole life insurance

comes with added features and “living” benefits. However, it is important to consider the

potential drawbacks, such as higher premiums compared to other insurance types, and the

complexity that may make it somewhat challenging to understand for some individuals.

Variable Universal Life Insurance (VUL). This type of insurance combines life

protection and investment opportunities within a single package. A portion of the premium

is directed toward various investment vehicles with the goal of wealth creation, and the

contract’s earnings depend on the performance of the chosen investments. This insurance

type offers a dual purpose, serving as both life insurance and an investment tool, with no

specific maturity age. In the event of the policyholder’s death, the cash value is payable

along with the assured sum, and the death component is not limited to the face value. VUL

provides liquidity, allowing policyholders to access funds when needed, potentially serving

as a storage solution for emergency funds. However, cash values and dividends are not
guaranteed, and the face amount and death benefit are contingent on the performance of

the investments. Additionally, VUL involves various investment fees that should be taken

into consideration.

Endowment Insurance. An endowment life insurance policy is designed to

provide a lump sum payout either after a specified period or in the event of the

policyholder’s death. The policyholder is obligated to pay premiums for a set number of

years or until reaching a particular age. This type of policy comes with certain advantages,

including the ability to accumulate savings for specific goals such as funding a college

education or securing retirement. It ensures guaranteed returns upon reaching maturity and

offers a level of insurance coverage. However, it is essential to note that endowment

policies typically involve higher premiums compared to alternative life insurance options,

making them less ideal for individuals seeking comprehensive life protection.

BTID (Buy Term, Invest Difference). A financial strategy that involves

purchasing term insurance and directing the savings from opting for this more cost-

effective insurance option into various investment vehicles. In contrast to the

straightforward nature of Whole Life or Variable Universal Life (VUL) insurance, where

one simply pays regular premiums, BTID allows individuals to design their own

investment approach. This entails navigating through a range of options such as mutual

and index funds to maximize growth potential. It incurs lower fees compared to universal

life insurance and VUL, affording individuals the autonomy to select and manage their

investments. This not only allows for flexibility in choosing different mutual funds but also

enables withdrawals at any time. Consequently, the strategy presents a pathway to

potentially higher investment returns (Pineda, 2023).

 Life insurance encompasses a wide array of product types. For instance, it includes

insurance products specifically designed for banking purposes, covering credit-related

risks, as well as educational insurance, which assists in financing the educational expenses

of the policyholder’s children. The common thread among these diverse products is their

shared objective of providing financial protection to beneficiaries in the event of the

policyholder’s demise or permanent disability (Bakar et al., 2018)

Life insurance is a proactive and responsible financial planning tool that can help

ensure the well-being and financial security of an individual’s family and loved ones,

particularly during challenging times. It is important to assess a specific financial situation

and need to determine the appropriate type and amount of life insurance coverage for an

individual’s circumstances.

One of the primary benefits of life insurance is that it provides a financial safety

net for a person’s dependents, including their spouse, children, or parents, in the event of

the individual’s untimely death. The death benefit can assist in covering living expenses,

outstanding debts, educational costs, and even future financial goals. It is important to note

that life insurance proceeds are typically tax-free for the beneficiaries. This means that the

entire benefit amount goes directly to one’s loved ones without being subject to income

tax. Knowing that an individual’s loved ones will have financial security and support in

the event of a person’s passing can offer peace of mind. This assurance can help reduce

stress and allow a person to focus on enjoying his life (Allianz PNB Life Insurance Inc.,

2020).

Respondents tend to view life insurance policies as a means of saving money to

secure satisfactory returns, take advantage of associated tax benefits, and even use them as
emergency funds due to their premature surrender options. This traditional perspective has

raised a fundamental question concerning the primary objectives of life insurance schemes:

whether they primarily serve as saving instruments or function as tools for protection. The

study’s outcomes indicate that life insurance is more commonly chosen as a saving

instrument rather than as a primary mechanism for safeguarding one’s economic well-

being (Deb et al., 2021).

Life insurance offers the advantage of defending a person’s life from the risk of

passing away as one of the most fundamental types of insurance. Many people also utilize

this kind of insurance to leave an inheritance to their wives or children after they pass away.

One of the advantages and benefits of life insurance is that it protects against the beginning

of financial losses or income loss caused by the passing of the covered family member,

who is typically a source of income for the family. The family can continue to exist when

a family member passes away thanks to the insurance premium. Both self-interest on behalf

of the insured and third-party benefit can be considered while purchasing life insurance

(Sari, 2021).

Life insurance is designed to provide for one’s loved ones in the event of an

individual’s unexpected passing, meeting their financial needs. When a person is primarily

concerned about taking care of his spouse and children, opting for life insurance is a wise

choice. The funds received from a life insurance policy can serve as a financial safety net

to support them during a difficult time of loss. Life insurance policies usually last for many

years, often until the policyholder reaches a specific age or for an extended period. They

offer long-term protection, however, they might not be the best solution for addressing

immediate financial needs. Insurance plans do more than just fulfill people’s needs; they
also help them handle risks in their lives. Life insurance, for example, addresses the risk of

someone’s death and the resulting financial difficulties for his dependents by providing

them with financial benefits (BPI AIA, 2020).

A life insurance policy offers both death benefits and survival benefits.

Furthermore, there is the potential to receive loyalty additions and surrender benefits in the

case of an individual’s life insurance policy. The premium for a life insurance plan can be

paid in installments at regular intervals or as a single, one-time lump sum payment. Life

insurance policies typically have a long-term duration, often spanning from a decade to

two decades. Life insurance can be in the form of an individual or group plan. Life

insurance encompasses various types, such as term plans, wealth-building policies,

retirement plans, money-back policies, and endowment plans. The premium an individual

contributes to his life insurance plan can qualify for tax benefits as per Section 80C of the

Income Tax Act. Conversely, the premium for a health plan is tax-deductible under Section

80D of the Income Tax Act (Kotak Life Insurance, 2021).

In summary, life insurance serves as a crucial financial tool designed to safeguard

the well-being and security of one’s family and loved ones, especially in times of

uncertainty. It provides a safety net in the form of a tax-free death benefit that can cover

living expenses, outstanding debts, education costs, and long-term financial goals, offering

peace of mind and reduced stress for policyholders. The choice of life insurance policy

type, whether term, whole life, variable universal life, or endowment, depends on

individual financial circumstances and objectives. Notably, life insurance is seen not only

as protection but also as a means of saving, taking advantage of tax benefits, and serving

as an emergency fund. It is essential for individuals and families to assess their unique
needs, understand policy terms, and explore the various options available, making

informed decisions to secure their financial futures.

Health Insurance

A health insurance policy acts as a crucial safety net, offering immediate financial

support in unforeseen medical crises. This contractual arrangement between the

policyholder and the insurance company covers medical expenses arising from illnesses,

injuries, or accidents. Within this framework, the insurance company assumes

responsibility for a portion or the entirety of medical costs, with the insured individual

paying a specified premium. The insurance company employs two primary methods to

compensate for medical expenses: cashless treatment, where the policyholder is exempt

from direct payments to the hospital as the insurer settles the bill directly, and

reimbursement, where the insured individual initially covers medical expenses and later

seeks compensation following the insurer’s procedures (Maheshwari, 2023).

Health insurance is a crucial tool for managing healthcare costs and accessing

necessary medical services. It provides financial protection against high medical expenses

and ensures that individuals can receive the healthcare they need when they need it. The

specific coverage and costs of a health insurance policy can vary, so it is important for

individuals to carefully review and understand their policy terms.

A variety of kinds of health insurance offered in the Philippines are discussed in

the papers. The National Health Insurance Act, which intends to establish a social health

insurance system with universal coverage within 15 years, is examined by Busse (1997).

Hindle (2001) examines the development of the government’s income-rated and

employment-based universal health insurance scheme, which has faced challenges such as
low earnings, subpar government health care services, and costly copayments. By

examining the patterns and trends in PhilHealth membership through time and talking

about the factors that contribute to membership growth among various membership groups,

Bredenkamp (2017) evaluates the development of health insurance coverage in the

Philippines through PhilHealth. Reisman (1996) looks at alternate funding sources, such

as private payment, direct provision, and national health insurance, to support the extension

of access to the formal medical care system (Dewi, 2022).

Expanding health insurance coverage typically seems to enhance access to

healthcare facilities, provide better financial security, and contribute to improved health

outcomes, although research findings are not entirely uniform. To advance the larger

objective of universal health coverage, it is essential to comprehend the factors that lead to

variations in the results of insurance reforms in order to guide future implementations of

publicly funded health insurance (Erlangga et al., 2019).

One fundamental role of health insurance is to enhance the affordability of

healthcare while shielding individuals from the substantial financial implications of

unforeseen accidents and illnesses that can potentially result in exorbitant medical bills.

Individuals who are in good health and young may often consider health insurance

as an unnecessary expense. They might assume they can do without it since they seldom

fall ill and have never had a hospitalization experience. However, it is crucial to recognize

that accidents and illnesses can strike anyone at any time. In the absence of health

insurance, individuals are left to bear the entire burden of their medical expenses, exposing

themselves to significant financial vulnerability.

 The significance of health insurance becomes even more pronounced when dealing

with severe illnesses. It not only alleviates the burden of substantial medical debts but also

serves as a safeguard for one’s financial assets (Arvantes, 2023).

In the Philippines, individuals have access to three primary categories of health

insurance options. These are:

Philippine Health Insurance (PhilHealth). A government-owned and controlled

corporation in the Philippines responsible for implementing the country’s national health

insurance program. Established in 1995, PhilHealth plays a crucial role in providing

Filipinos with access to affordable healthcare services and financial protection against high

medical expenses.

HMO (Health Maintenance Organisations). A type of managed care health

insurance plan that provides healthcare services through a network of healthcare providers

and facilities. HMOs are popular among individuals and employers looking for cost-

effective healthcare coverage with a focus on preventive care and coordination of services.

However, HMOs may not be suitable for those who desire greater flexibility in choosing

healthcare providers or who have specific healthcare needs that require out-of-network

specialists.

Prepaid Health Cards. Often referred to as prepaid health insurance or health

maintenance cards. Prepaid health cards is a type of healthcare financing option that

provides individuals with a fixed amount of healthcare coverage in exchange for a prepaid

premium. These cards are similar to traditional health insurance. In that, they help cover

medical expenses, but they differ in their payment structure and coverage options.

Private Health Insurance. Also known as individual health insurance or personal

health insurance. This insurance covers individuals’ and families’ healthcare purchases

from private insurance companies. Private health insurance provides financial protection

against the cost of medical expenses, including doctor visits, hospitalization, surgeries,

prescription medications, and other healthcare services.

Health insurance is important for a variety of reasons, and it plays a crucial role in

ensuring individuals and families have access to necessary medical care. It is a fundamental

tool for maintaining and improving one’s health, as well as providing financial security in

the face of medical challenges.

Health care can be expensive, especially for major medical treatments, surgeries,

or long-term care. Health insurance helps protect individuals and families from high and

unexpected medical costs by covering a portion of the expenses. With health insurance,

individuals have access to a network of healthcare providers, including doctors specialists,

hospitals, and clinics. This ensures they can receive necessary medical services in a timely

manner. The insurance plans often include coverage for prescription medications. This

helps make necessary drugs more affordable and accessible, ensuring individuals can

manage chronic conditions and recover from illness. Health insurance also covers

childbirth and postnatal care for expectant mothers. It also covers pediatric care including

vaccinations and well-child check-ups, for newborns and children (Kwik.insure, 2021).

The Health Insurance Association of America offers a definition of health insurance

as ‘coverage that offers benefits in response to illness or injury, encompassing protection

for accident-related losses, medical expenses, disability, and accidental death and

dismemberment. In contemporary living, health insurance has become a vital necessity for

every household, particularly those facing financial constraints. Worldwide, health

insurance serves as a crucial and life-saving program, akin to a benevolent figure that

comes to the rescue of many lives. (Vethirajan, 2019)

Health insurance plays a pivotal role in an individual’s annual financial planning,

offering a wide array of benefits. It provides coverage for hospitalization expenses related

to illnesses, accidents, and injuries, which includes costs like room charges, doctor’s fees,

diagnostic tests, and surgical procedures. In addition, it caters to both pre- and post-

hospitalization expenses, encompassing follow-up visits, medications, and diagnostic tests,

thereby alleviating the financial burden on policyholders. Transport expenses are also

addressed, typically as a sublimit for each hospitalization.

Moreover, health insurance plans often feature preventive health check-ups on an

annual basis to encourage individuals to monitor their health and make necessary lifestyle

adjustments. Waiting periods may apply for specific illnesses, varying from one to four

years, contingent on the policy’s terms and conditions. Initiating a health insurance plan at

an early stage in life can facilitate policyholders in bypassing the waiting period, a time

when the likelihood of encountering specific illnesses is relatively low.

An appealing aspect of health insurance is the "No Claim Bonus," which serves as

an incentive for policyholders who do not file claims during the policy period. This bonus

can augment the sum insured without incurring additional premiums, bestowing valuable

protection during later life stages, when certain illnesses become more probable.

Health insurance policies also grant income tax rebates on premium payments,

thereby reducing the overall cost of the policy and delivering both financial security and

tax advantages. Significantly, health insurance options are available for individuals at

various life stages, spanning from a young age to family life, mid-age, and even post-
retirement. Each stage offers unique choices and benefits, ensuring that individuals can

identify a suitable plan to manage medical expenses while safeguarding their financial

stability (Arora and Jain, 2023).

Numerous benefits come with health insurance, but selecting the right one

necessitates an understanding of the diverse mechanisms employed by insurance policies.

Some health insurance providers opt to reimburse the full treatment expenses, while others

facilitate cashless treatment services. In the case of cashless treatment, patients are not

required to make any direct payments to the hospital, as the insurance covers the entire

cost. It is noteworthy that the nature of claims can vary between hospitals. Hence, it is

essential to grasp the intricacies of health insurance before making a final decision.

Many organizations extend health insurance benefits to their employees and their

families. However, it is crucial to recognize that these benefits may cease when leaving the

organization. Consequently, individuals contemplating a transition from employment to

entrepreneurship or any other endeavor should consider securing a health insurance policy

for themselves and their family members (Cigna, 2021).

In our modern world, having health insurance is incredibly important for both

safeguarding individuals well-being and protecting finances. While people might think that

being young and healthy means they can skip getting health insurance, it is actually quite

the opposite. Health emergencies can be unpredictable, especially in today’s uncertain

times. Even if someone feels healthy, factors like his family’s medical history or the stress

of a busy lifestyle can increase his risk of health issues down the road. Plus, in the midst

of a pandemic, having health insurance offers some much-needed peace of mind.

 Having health insurance is a wise choice for several reasons. First, it helps prevent

individuals from having to dip into their savings when unexpected medical expenses arise.

For example, if someone were diagnosed with a major critical illness, his insurance

coverage would kick in, providing a significant sum of money that can go toward their

hospital bills, sparing his hard-earned savings.

Second, health insurance prepares people for the unexpected. It acts as a protection

for any major or minor critical illness that might disrupt someone’s life. It gives people the

comfort of knowing that a person is financially ready for whatever health challenges may

come in his way.

Third, someone’s family benefits from health insurance. A person can choose a

policy that covers his immediate family members, ensuring their protection even in times

of illness. For instance, a well-designed plan can guarantee that if an individual passes

away, his family receives the full benefit amount.

Lastly, having health insurance can motivate people to take better care of

themselves. It encourages them to be proactive about their health rather than reacting to

health issues as they come up. It promotes a healthier and more active lifestyle, from

regular exercise to routine check-ups (Beltran, 2022).

To summarize, health insurance functions as a crucial financial support system,

providing essential coverage in the face of unexpected medical crises. This contractual

agreement between individuals and insurance companies is designed to cover medical

expenses arising from illnesses, injuries, or accidents. It not only enhances the affordability

of healthcare but also shields individuals from the potentially devastating financial

implications of unforeseen medical bills. By providing financial protection, access to

healthcare services, and tax advantages, health insurance plays a pivotal role in an

individual’s financial planning and well-being, motivating individuals to proactively

manage their health and secure their financial stability. In today’s uncertain world, health

insurance is a prudent choice, offering peace of mind and safeguarding both health and

finances.

Insurance Literacy

Insurance holds a vital role in both individual and societal financial security. On a

personal level, having an insurance policy serves as a crucial tool for managing risks,

allowing individuals to transfer potential financial losses caused by unforeseen events to

insurance companies (Lin, Bruhn, & William, 2019; Scriven, 2008). However, it is

essential to recognize the specific risks individuals face, evaluating the likelihood and

impact of these events, directly or indirectly affecting consumers. This understanding aids

in determining the necessary aspects of insurance policies, such as what needs protection,

the appropriate coverage, and value, preventing issues related to underinsurance (Allodi et

al., 2020).

It is evident that consumers generally have a low level of understanding when it

comes to insurance, and this lack of knowledge varies significantly depending on

demographic factors. Therefore, there is a pressing need for a more uniform and precise

definition of insurance literacy, along with a reliable tool for assessing it. This tool should

encompass key aspects that address fundamental insurance matters, facilitating

comparisons and informed educational decisions. The journey towards achieving insurance

literacy is termed “insurance education,” with the ultimate goal being behavioral change,

resulting in increased acceptance and more effective use of insurance products to enhance
consumers’ financial well-being. It is important to note that insurance products and services

hold substantial economic significance within the national economy, playing a vital role in

household budgeting and financial planning, as highlighted in the works of Tennyson

(2011), ASIC (2014), OECD (2008), and ANZ (2015) (Sanjeewa and Hongbing, 2019).

The lack of financial knowledge and inadequate insurance coverage have emerged

as significant concerns affecting the financial stability and welfare of households.

Nevertheless, research indicates that being financially literate does not automatically

equate to being well-versed in insurance matters, and more targeted educational efforts can

enhance one’s understanding of insurance. There is limited information available regarding

how a lack of insurance knowledge influences the willingness to acquire and maintain

insurance (Weedige et al., 2019).

The insurance sector is undergoing constant change and is now incorporating

Artificial Intelligence (AI) and Machine Learning (ML) into its operations. Chatbots and

virtual assistants on websites and mobile apps are enhancing the customer experience by

offering personalized guidance, addressing insurance-related inquiries, and educating

consumers about insurance products. AI-driven solutions enable companies to provide

real-time, engaging information. Furthermore, in an age where cybersecurity is a

significant business concern, the utilization of blockchain technology can potentially

transform the insurance industry by ensuring secure information sharing.

In the insurance industry, promoting awareness and education is essential, as it

empowers individuals to make well-informed decisions for their financial stability.

Looking ahead, the industry holds promising prospects for enhancing awareness and

disseminating knowledge through innovative technologies. It is crucial for the industry to

continually adapt to evolving trends and consumer preferences to improve educational

initiatives and ensure a financially secure future for individuals and communities (Gupta,

2023).

Insurance literacy holds significance due to its role in influencing individuals’

financial decision-making, much like financial literacy impacts overall financial choices.

However, addressing this issue is not as straightforward as merely offering more

information during the insurance purchase process. This complexity arises for two primary

reasons. First, a substantial number of individuals may not be inclined to purchase

insurance unless they grasp the underlying necessity. Second, there's a need to unravel and

correct misconceptions related to financial security, personal well-being, and risk.

Additionally, it is crucial to deliberately dismantle cognitive biases that individuals

encounter throughout their insurance journey (SCOR, 2022).

Health insurance literacy refers to the degree to which individuals possess the

knowledge, skills, and confidence to seek and assess information about health insurance

plans, choose the most suitable plan based on their financial and health needs, and

effectively use the chosen plan. In many low- and middle-income countries (LMICs), there

is a lack of health insurance literacy, hindering the adoption of health insurance. Research

conducted in Uganda revealed that 34% of the surveyed population were unaware of health

insurance. Similarly, countries like India (46%), Myanmar (66%), and Hispanic American

communities in the USA (70%) showed a high proportion of people lacking sufficient

knowledge about health insurance.

Awareness of available insurance schemes significantly enhances the utilization of

health insurance and subsequently promotes healthcare access. People often enroll in health
insurance programs due to personal experiences, word-of-mouth recommendations, or

awareness campaigns through mass media such as newspapers, radio, and television.

Additionally, friends, community meetings, school gatherings, and health workers play

pivotal roles in increasing awareness about health insurance. However, some enrollees

might miss premium payments and remain unaware of their lapsed insurance coverage,

particularly observed among women farmers.

The inadequate awareness of health insurance among the general population in

LMICs is evident. Having knowledge about health insurance can enhance individuals’

confidence and self-efficacy, making it a crucial factor for enrolling in health insurance

programs. To address this issue, outreach programs aiming to increase general knowledge

about health insurance and integrating health insurance education within healthcare

delivery systems can significantly improve health insurance uptake. Various methods are

globally employed to promote and raise awareness about different health insurance

schemes.

It is crucial to comprehend the various strategies employed to enhance awareness

of health insurance within the nation. Moreover, given the rising population and limited

public health expenditure on healthcare, it becomes essential to assess whether resources

are allocated judiciously. To achieve this, it is imperative to determine the efficiency of

these policies, allowing people to shift their attention toward the most appropriate

interventions (Reshmi et al., 2021).

Health insurance literacy can be defined as the extent to which individuals possess

the knowledge, skills, and confidence to seek and assess information about health insurance

plans, choose the most suitable plan considering their financial and health circumstances,
and effectively utilize the chosen plan after enrollment, as outlined by Quincy in 2012.

According to Paez et al. in 2014, health insurance literacy also encompasses the ability to

comprehend the structure of health insurance benefits and estimate one’s cost-sharing

responsibilities. Research has consistently shown that health insurance literacy is notably

low among American consumers, as demonstrated by studies such as those by Loewenstein

et al. in 2013 and Long & Goin in 2014. Consumers generally struggle with grasping health

insurance terminology and encounter substantial difficulties when it comes to

comprehending the intricacies of cost-sharing and calculating healthcare expenses, as

highlighted by studies like Blumberg et al. in 2013 and Parragh & Okrent in 2015. This

lack of understanding regarding fundamental health insurance terms hinders consumers

from making well-informed choices in selecting the most appropriate health plan and

effectively using their coverage to access healthcare services.

International students are more likely to have limited health insurance knowledge

compared to domestic students. The university should reconsider its responsibility to

provide comprehensive information. To counteract the impact of insufficient health

insurance literacy on healthcare utilization, international students should receive guidance

on their insurance plan coverage from both healthcare and insurance providers. Since many

international students are navigating the U.S. health insurance system for the first time,

they can benefit from a systematic review of insurance plans to become acquainted with

the healthcare benefits included in their plan. To bridge the gap in health insurance literacy,

insurance companies should establish an “onboarding” process to educate new consumers

about the features of their insurance plans when they enroll in a new plan (Adegboyega et

al., 2020).
 Insufficient health insurance literacy can significantly hinder an individual’s

capacity to make well-informed decisions while seeking medical treatment, leading to

potential negative consequences for both their personal health and financial stability.

Existing literature corroborates this claim, demonstrating that limited understanding of

health insurance often results in delayed or avoided medical care, reduced confidence in

accessing necessary healthcare, absence of a regular healthcare provider, challenges in

managing medical expenses, unwarranted healthcare expenses, and poorer health outcomes

(Liu et al., 2023)

Many individuals encounter challenges in comprehending fundamental financial

terms like premium and deductible, which are commonly found in health insurance

policies. Consequently, a significant portion of the population struggles to make informed

and rational decisions when selecting an appropriate health insurance policy. This

difficulty can result in citizens being underinsured, leading to unforeseen expenses or

insufficient coverage. Furthermore, apart from the financial repercussions of choosing a

suboptimal insurance policy, research suggests that opting for a well-suited policy can

positively impact an individual’s health outcomes (Holst et al., 2022).

To summarize, insurance literacy plays a critical role in both individual and societal

financial well-being. It involves understanding the intricacies of insurance policies, their

necessity, coverage options, and their impact on personal financial security. However,

studies reveal that many individuals, including international students, often lack essential

knowledge about insurance, especially in the context of health insurance. This knowledge

gap can have adverse consequences, leading to suboptimal healthcare decisions, delayed

or avoided medical treatments, and potential financial instability. The insurance industry
is continually evolving, incorporating innovative technologies such as AI, chatbots, and

blockchain to enhance consumer awareness and education. Promoting insurance literacy is

crucial, as it empowers individuals to make informed choices and, in the long run, ensures

better financial planning and security. Therefore, addressing insurance literacy through

educational initiatives and leveraging technology to disseminate knowledge is pivotal in

securing the financial well-being of individuals and communities alike.

Theoretical Framework

The Theoretical Framework for this study is grounded in two well-established

psychological theories: the Social Learning Theory and the Cognitive Learning Theory.

These theories provide the fundamental perspectives through which the researchers analyze

the complex elements of perceived awareness regarding life and health insurances while

also contributing to the wider notion of insurance literacy.

Social Learning Theory

The Social Learning Theory provides a robust framework for understanding how

individuals acquire knowledge and behaviors related to life and health insurance awareness

through social interactions and observational learning. By applying the principles of this

theory, insurance providers, policymakers, and educators can design effective strategies to

raise awareness, enhance understanding, and promote responsible insurance practices,

ultimately leading to improved financial security and access to healthcare for individuals

and communities. These strategies can raise awareness, enhance understanding, and
promote responsible insurance practices. Additionally, the cumulative effect of these

efforts contributes to improved financial security, access to healthcare, and overall well-

being for individuals and communities alike. As people navigate an ever-changing

insurance landscape, the enduring relevance of the Social Learning Theory in shaping

insurance awareness cannot be overstated (Online MSW Programs, 2022).

In essence, the Social Learning Theory provides a robust and enduring framework

for comprehending how individuals acquire knowledge and behaviors related to life and

health insurances awareness. This framework has significant implications for addressing

the perceived awareness of life and health insurances and, more broadly, for advancing

insurance literacy. By leveraging the principles of social learning, insurance providers,

policymakers, and educators can develop effective strategies aimed at elevating awareness

levels, enhancing understanding, and fostering responsible insurance practices among

individuals and communities. As these strategies continue to evolve in an ever-changing

insurance landscape, they hold the promise of not only enhancing financial security but

also increasing access to healthcare, ultimately contributing to the overall well-being of

individuals and communities alike. The application of this framework serves as a valuable

tool in the ongoing quest to empower individuals with the knowledge and skills needed to

make informed decisions regarding their life and health insurances investments, thereby

ensuring a more secure and prosperous future.

Cognitive Learning Theory

In an evolving landscape where insurance plays a pivotal role in financial security

and healthcare access, leveraging Cognitive Learning Theory can contribute to enhanced
insurance awareness, leading to improved well-being and quality of life for individuals and

communities. As individuals develop the cognitive skills and knowledge necessary to

navigate the complexities of insurance, they are better equipped to make informed choices

that align with their unique needs and goals. Thus, the application of Cognitive Learning

Theory in insurance awareness represents a significant step toward promoting financial

security and equitable healthcare access for all. Cognitive learning theory examines the

thought processes that underlie human learning, recognizing that understanding how we

learn involves a deep consideration of mental processes. This theory acknowledges that

learners can be shaped by a combination of internal and external factors (Western

Governors University, 2023).

Overall, as the insurance landscape continues to evolve and take on an increasingly

pivotal role in financial security and healthcare access, the incorporation of Cognitive

Learning Theory provides a valuable pathway toward heightened insurance awareness.

This, in turn, holds the promise of significantly enhancing the overall well-being and

quality of life for individuals and communities. Through the application of Cognitive

Learning Theory, individuals can acquire the cognitive skills and knowledge necessary to

navigate the intricate realm of insurance effectively. Armed with this understanding, they

become empowered to make informed decisions that align with their specific needs and

aspirations.

The utilization of Cognitive Learning Theory in the context of insurance awareness

serves as a profound stride towards advancing financial security and ensuring equitable

access to healthcare for all. This theory delves into the underlying thought processes
governing human learning, acknowledging that comprehending how individuals learn

necessitates a deep exploration of mental faculties.

As the researchers strive to enhance perceived awareness of life and health

insurance, while fostering a framework for insurance literacy, Cognitive Learning Theory

emerges as a potent tool. By equipping individuals with the cognitive tools to navigate

insurance intricacies, the researchers can empower them to secure their financial futures

and access vital healthcare services, thereby fostering a more prosperous and equitable

society.

Conceptual Framework

Life and Health Insurances

Awareness:
h02 Personal Perception
Benefits
Respondents Profile: Source of Information
Age
Sex
Academic Program h01
Year Level
h03
Level of Insurance Literacy:
Knowledge
Skills
Attitude

Figure 1: Research Paradigm of the Study

Figure 1 presents the research paradigm illustrating the model employed to examine

the relationships among the key variables in this study. The depicted model reflects the

hypotheses formulated by the researchers. Specifically, it shows that there is no significant

relationship between “Life and Health Insurance Awareness” and the “Level of Insurance

Literacy,” “Respondents Profile” and “Life and Health Insurance Awareness,” as well as

between “Respondents Profile” and the “Level of Insurance Literacy.” Technically, the

arrows in the diagram depict the hypothesized absence of significant relationships.

Additionally, it depicts the sub-variables included in the study.

Statement of the Problem

This study aims to evaluate the extent of knowledge among students enrolled in

Baliuag University’s College of Business Administration and Accountancy concerning the

benefits of life and health insurances. The primary objective is to determine the overall

level of insurance literacy within this specific academic group. Within this context, the

researchers intend to conduct a detailed analysis of various factors and address the

following specific research questions:

1. What is the demographic profile of the respondents in terms of:

1.1. Age,

1.2. Sex,

1.3. Academic Program,

1.4. Year Level, and

1.5. Average Family’s Monthly Income?

2. How may the level of life and health insurances awareness of the respondents be

described in terms of:

2.1. Personal Perception,

2.2. Benefits, and

2.3. Source of Information?

 3. How may the level of insurance literacy of the respondents be described in terms

of:

3.1. Knowledge,

3.2. Skills, and

3.3. Attitude?

4. Is there a significant relationship between the level of life and health insurances

awareness of the respondents and their insurance literacy?

5. Is there a significant difference in the level of life and health insurances awareness

when the respondents are grouped according to their profile?

6. Is there a significant difference in the level of insurance literacy of the respondents

when they are grouped according to their profile?

7. What literacy program on insurance may be drawn based from the result?

Hypotheses of the Study

Ho1: There is no significant relationship between the level of life and health

insurances awareness of the respondents and their insurance literacy.

Ho2: There is no significant difference in the level of life and health insurances

awareness when the respondents are grouped according to their profile.

Ho3: There is no significant difference in the level of insurance literacy of the

respondents when they are grouped according to their profile.

Definition of Terms

The researchers have provided operational definitions for the following terms to

ensure that readers can readily and thoroughly comprehend the research study.

Attitude. Attitude refers to a person’s overall evaluation, feeling, or disposition

toward a particular object, person, group, idea, or situation. It represents an individual’s

emotional and cognitive response to something and shapes their behaviour, choices, and

interactions.

Benefits. Are positive outcomes, advantages, or gains that one receives from a

particular action, situation, or decision. Benefits can be material, such as financial gains or

physical well-being, or they can be more intangible, like personal satisfaction, improved

mental health, or a sense of accomplishment.

Health Insurance. A type of insurance coverage that pays for medical and surgical

expenses incurred by the insured individual.

Health Insurance Awareness. Is the extent to which individuals or communities

have knowledge and understanding of health insurance, its benefits, coverage options,

costs, and how to access and utilize health insurance services.

Insurance. A practice or agreement in which a company or government entity

offers assurance of compensation for defined losses, damages, illnesses, or fatalities in

exchange for the payment of a premium.

Insurance Literacy. Refers to an individual’s or a group’s level of understanding

and knowledge regarding insurance-related concepts, policies, coverage, premiums, and

the overall workings of the insurance industry.

 Knowledge. Knowledge is the understanding, information, and awareness that an

individual or a group of individuals possess about the world, facts, concepts, skills, or a

particular subject. It represents the accumulation of facts, data, experiences, and expertise

that people have acquired through learning, observation, study, and personal or collective

experience.

Life Insurance. A financial safety net, providing financial security to loved ones

and beneficiaries after the policyholder’s death.

Life Insurance Awareness. Refers to an individual’s or a community’s level of

knowledge and understanding about life insurance, its purpose, benefits, and how it works.

Personal Perception. Plays a fundamental role in how individuals perceive and

understand the world around them, as it shapes their awareness, knowledge, and behavior.

Skills. A person’s learned and developed abilities to perform specific tasks, carry

out particular functions, or execute activities effectively and competently. Skills are

typically acquired through education, training, practice, and experience.

Source of Information. Any place, person, document, or entity from which data,

facts, knowledge, or details are obtained or extracted. These sources can be used to gather

information on a wide range of topics, reliability and credibility.

Scope and Limitation of the Study

This study aims to gather data among the Business Administration and

Accountancy students for the School Year 2023-2024 of Baliuag University, located in

Baliuag City, Bulacan. The selection of these respondents is based on their existing

knowledge of finance, which implies their potential familiarity with insurance concepts.
 CHAPTER II

METHOD

In this chapter, the researchers present the research design, the population of the

study, the sampling procedure, the locale of the study, the research instrument, the

validation and reliability testing, the ethical considerations, the data gathering procedure,

and the statistics utilized for data analysis.

Research Design

This study used a quantitative design method, specifically descriptive, evaluative,

and correlational research design utilizing a set of questions for the respondents to answer

for the researchers to gather data in this research.

Descriptive research is a type of research design that aims to observe, document,

and describe a subject without manipulating it. Its primary purpose is to provide a detailed

and accurate account of the characteristics, behavior, or attributes of a particular group,

event, situation, or a phenomenon. Descriptive research is often used to answer questions

like ‘what’ rather than ‘why’ without attempting to explain why it is happening

(Librarianship Studies & Information Technology, 2022).

An evaluative research is a type of research design that focuses on assessing the

effectiveness, efficiency, outcomes, and impacts of programs, policies, interventions, or

projects. Its primary goal is to determine whether a particular program or intervention is

achieving its intended objectives, and if so, to what extent. It is often used in fields such as

social sciences, public policy, healthcare, education, and business to inform decision-
making, improve programs, and allocate resources effectively (International Encyclopedia

of Education (Third Edition), 2010).

Correlational Research Design is a form of non-experimental research

methodology that investigates the association between two or more variables. Its purpose

is to ascertain whether a correlation exists among these variables and, if so, to characterize

the nature of this correlation. The primary objective of correlational research is to recognize

connections between variables and gain insight into their interrelationships. This research

approach can be employed to investigate causal relationships or observe patterns within

data (Pallister, 2023).

Research Locale

The research took place at Baliuag University’s Main Campus, located on Gil

Carlos Street in Baliwag City, Bulacan. The respondents of this study are the students

enrolled in the College of Business Administration and Accountancy (CBAA) Department.

The choice of CBAA students as the study’s main focus is driven by their specialization in

business-related subjects. This specialization ensures that these students possess a solid

understanding of the field of business, including insurance, which is a fundamental

component of their major subjects.

Respondents of the Study and Sampling Procedure

Respondents received a questionnaire survey form via Google Forms, with the link

sent through their Facebook Messenger. The demographic information to be obtained from

respondents includes their age, sex, program, and year level. The researchers maintained

the confidentiality of the data, using it solely for research purposes.

 Based on the data provided by the College of Business Administration and

Accountancy Department, a total of 264 students are enrolled for the 2nd trimester of the

School Year 2023-2024 of the College of Business Administration and Accountancy at

Baliuag University. To ensure the study remains impartial and free from potential bias, the

four researchers of the study did not participate as respondents. This step is taken to prevent

their personal interests from affecting the study’s results. Therefore, there are a total of 260

students in the College of Business Administration and Accountancy Department.

BSA students are divided into four year levels: 30 in the first year, 19 in the second,

53 in the third, and 57 in the fourth, totaling 159. There are 34 students enrolled in the

BSBA FM program, with 2 in the first year, 17 in the second year, and 11 in the third,

excluding the researchers. There are 46 students enrolled in the BSBA MM program,

including 11 in the first year, 13 in the second year, and 22 in the third year. There are 21

students enrolled in the BSMA program: 3 in the first year, 4 in the second year, and 14 in

the third year. Lastly, there are a total of 4 students in Digital Business and Analytics: 1 in

the first year, 1 in the second year, and 2 in the third year.

In selecting participants, the researchers have opted for the method of universal

sampling. This approach can help to achieve optimum complexity for any class of signal.

It also involves the collection of samples in which members of the population do not have

the same chance of being included in the sample and the probability of including one of

them is unknown (Avron et. al, 2019). In contrast to random sampling, where each member

of the population has an equal chance of being selected, non-probability sampling methods

do not ensure equal representation. This approach helps prevent biases that may arise from

unequal inclusion, as it allows each member of the population an opportunity to be part of

the sample, thereby reducing the risk of systematic exclusion.

To determine the specific minimum number of respondents, the researchers utilized

Slovin’s formula with a 5% margin of error.

𝑁
𝑛=
1 + 𝑁𝑒 2
Where:

n = minimum number of samples

N = total number of sample population

e = margin of error

Given:

n = (to compute)

N = 260

e = 5%

Computation:

260 𝑛=
260
𝑛= 1 + 260 (0.0025)
1 + 260 (5%)2

260 𝑛 = 158.5365853658537
𝑛=
1 .64
𝑛 ≈ 159

Using Slovin’s formula, the computed sample population is minimum of 159. To

get the minimum number of respondents for each academic program and year level, the

sample population is divided by the total population.

 The table below presents the total number of students obtained from the CBAA

office and the corresponding number of respondents designated to participate in the survey.

Table 1. Respondents of the Study

Academic Program & Total no. of Respondents of the

Year Level students Study

BSA 1 30 25

BSA 2 19 13
BSA
BSA 3 53 35

BSA 4 57 38

BSBA FM 1 2 1

BSBA FM BSBA FM 2 17 10

BSBA FM 3 11 8

BSBA MM 1 11 9

BSBA MM BSBA MM 2 13 9

BSBA MM 3 22 16

BSMA 1 3 2

BSMA BSMA 2 4 2

BSMA 3 14 10

DBA 1 1 1

DBA DBA 2 1 1

DBA 3 2 1

Total 260 181

Research Instrument

The researchers designed their research instrument by creating a customized survey

questionnaire. The demographic profile which involves the age, sex, academic program,

and year level of the respondents are included in the upper part of the research instrument.

To enhance its relevance and effectiveness, they incorporated certain parts of research

instruments from prior studies. These include the “Young Adults’ Attitudes and

Perceptions on Health Insurance and their Health Insurance Literacy Levels” a study

authored by Yang in 2016, the “Awareness of Health Insurance among Adolescents” a

study by Khan and Rao in 2022, “A Study of Various Factors Influencing Buying Decision

Making of Health Insurance Policies” by Parihar and Ghosh in 2021, the “Awareness Of

Health Insurance Among The College Students In Tirunelveli District” a study by

Vethirajan in 2019, the “Insurance Literacy: Significance of Its Dimensions for Insurance

Inclusion in Uganda” a study by Kiwanuka and Sibindi in 2022, the “Investigating the

Factors of Consumers’ Purchase Intention Towards Life Insurance In Bangladesh: An

Application of the Theory of Reasoned Action” a study by Nomi and Sabbir in 2020, and

“Why do Malaysian Young Adults Buy Health Insurance?” a study by Yeow et al. in 2021.

This approach allowed the researchers to craft a comprehensive questionnaire that

was tailored to their specific research goals and objectives, while also benefiting from the

insights and expertise shared by the authors of the mentioned studies. The questionnaire is

thoughtfully organized into five distinct sections, each serving a unique purpose:

Part I – The demographic profile of the respondents in terms of Age, Sex, Academic

Program, Year Level, and Average Family’s Monthly Income.

 Part II – The assessment of the respondents in Life and Health Insurances

Awareness, considering the Personal Perception, Benefits, and Sources of Information

factors.

Part III – The assessment of the respondents in Insurance Literacy considering the

Knowledge, Skills, and Attitude categories.

The researchers used a Likert scale method where participants expressed their

opinions by selecting from options Strongly Agree, Agree, Disagree, and Strongly

Disagree. The scoring for the favorable statements is 4 for Strongly Agree, 3 for Agree, 2

for Disagree, and 1 for Strongly Disagree.

The following criteria are adopted to measure the level of awareness with favorable

statements:

Range of Mean Values Scale Value Description Interpretation

3.25 – 4.00 4 Strongly Agree Highly aware

2.50 – 3.24 3 Agree Aware

1.75 – 2.49 2 Disagree Unaware

1.00 – 1.74 1 Strongly Disagree Not aware at all

For the measurement of the level of insurance literacy, the mean responses is

interpreted using the following scale:

Range of Mean Values Scale Value Description Interpretation

3.25 – 4.00 4 Strongly Agree Highly literate

2.50 – 3.24 3 Agree Literate

 1.75 – 2.49 2 Disagree Illiterate

1.00 – 1.74 1 Strongly Disagree Not literate at all

Validation and Reliability Testing

Reliability ensures that when the same individual is retested using an identical or

equivalent test, their scores remain consistent. Pilot testing is conducted via an online

survey utilizing Google Forms. These online forms were distributed to respondents who

share similar characteristics with the intended sample. Additionally, four experts in the

relevant field played a vital role in enhancing the test’s validity and reliability: (1) a

grammar expert, (2) a statistician, (3) a business professor, and (4) a research professor.

Ethical Considerations

Informed Consent. Before starting the survey, the researchers made sure to explain

to the participants what the study was all about. They politely asked if the participants

would be interested in joining and made it clear that participating was entirely up to them.

Anonymity and Confidentiality. All the information provided by the respondents

was kept private by the researchers. The demographic profile and even the answers written

in the survey questionnaire were exclusive to the researchers only. Also, all the personal

information remained anonymous and was only used for the purpose of the research study.

Honesty, sympathy, and respect. Prior to the dissemination of survey

questionnaires, researchers had given the respondents an assurance that they were reliable

and that the information gathered from them was treated with respect and would not be

used for any other purposes to ensure that the data gathering procedure was ethically right.

Data Gathering Procedure

 The researchers conducted an online survey in the department of the College of

Business Administration and Accountancy using Google Forms as their primary tool for

data collection. This decision is driven by the ease of use associated with Google Forms.

The user-friendly interface, accessibility, and straightforward design of Google Forms

make it a convenient and efficient platform for survey administration. This choice aligns

with the researchers' objective to streamline the data collection process, ensuring a smooth

experience for participants and facilitating efficient analysis of the gathered information.

They asked for the validation of the research instruments that they used from the faculty

members of Baliuag University. This validation process helps ensure the reliability and

appropriateness of the survey instruments for the study.

Before answering the Google Form they first oriented the respondents about the

purpose of the study and gave them an idea about the research topic. The Google Form was

given to the selected number of students based on the results of the sampling procedure.

The respondents have the freedom to ask questions to the researchers about the

questionnaire. All the data collected from the respondents are used for the interpretation

and analyses of the results to deeply understand the variables of the study. Furthermore,

adherence to ethical norms and principles were paramount throughout the data collection

process. Researchers understand the significance of ethical guidelines, as they not only

promote the study’s objectives but also uphold the values crucial to collaborative research

efforts.

Statistical Treatment of Data

After the completion of the data collection process, the collected raw data

underwent comprehensive tabulation, calculation, and interpretation, employing a range of

suitable statistical methodologies. These analytical tools were applied to derive valuable

insights from the data that were collected from the College of Business Administration and

Accountancy students’ responses. The statistical techniques utilized encompassed:

Frequency and Percentage method. This method was employed to address SOP

number 1 and to facilitate the presentation of the demographic profile of the respondents.

Key demographic variables such as Age, Sex, Academic Program, and Year Level were

analyzed using this approach. It allowed the researchers to understand the distribution and

composition of the surveyed population.

Weighted Mean. SOP numbers 2 to 6 were addressed using this method, which

aims to provide a comprehensive description of the indicators pertaining to Life and Health

Insurances Awareness and Insurance Literacy. By computing the weighted mean, the

researchers were able to determine the average scores or central values for these factors.

Pearson R Correlation. In addition to the above methods, correlation analysis

using the Pearson correlation coefficient (for linear relationships) was employed to assess

the relationships between Insurance Awareness and Insurance Literacy variables. This

helped the researchers in understanding the degree and direction of associations between

different aspects of the data, providing valuable insights into the study’s findings.

Where:

r = Pearson correlation coefficient yi = y-variable sample

xi = x values samples ȳ = mean of the values in y-variable

x̄ = mean of the values of x-variable

 The researchers plan to assess the relationship between the Life and Health

Insurances Awareness and Insurance Literacy variables, and this assessment is based on

the following interpretations for the correlation coefficient values:

Size of Correlation Interpretation

± 1.00 Perfect positive/negative correlation

±.71 to .99 Strong perfect positive/negative correlation

±.51 to .70 Moderately positive/negative correlation

±.31 to .50 Weak positive/negative correlation

±.01 to .30 Negligible positive/negative correlation

T-tests. The researchers also used T-tests to evaluate whether there are statistically

significant differences in the awareness of life and health insurances, insurance literacy,

and the demographic profile of the respondents. Specifically, the researchers utilized the

one-sample t-tests. This statistical analysis provided valuable insights for the study, thereby

enhancing its overall reliability.

𝑚𝑒𝑎𝑛 − 𝑐𝑜𝑚𝑝𝑎𝑟𝑖𝑠𝑜𝑛 𝑣𝑎𝑙𝑢𝑒

𝑡 =
𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑 𝑒𝑟𝑟𝑜𝑟

Analysis of Variance (ANOVA). For this study, the application of Analysis of

Variance (ANOVA) allowed the researchers to determine the means to evaluate whether

there are significant differences in awareness and insurance literacy among various

demographic subgroups. The results enhanced the researchers’ comprehension of the

connections between demographic characteristics and these significant variables.

 The formula for a one-way ANOVA, which compares means across two or more

groups, is expressed as:

where:

F = the test statistic for ANOVA

MSB = the mean square between groups

MSW = the mean square within groups

This formula helps evaluate whether the differences in group means are larger than

what would be expected due to random variation.

 CHAPTER III

PRESENTATION, ANALYSIS, AND INTERPRETATION OF DATA

This chapter presents the analysis and interprets the data and information collected

pertaining to both the general and specific problems outlined in the statement of the

problem.

Research Question # 1: What is the demographic profile of the respondents in terms of:

Table 2. Demographic Profile of the Respondents

Demographic Profile Frequency Percent

Age

20 and below 93 51.4%

21 to 25 86 47.5%

26 and above 2 1.1%

Total 181 100%

Gender

Female 123 68.0%

Male 58 32.0%

Total 181 100%

Academic Program

BS in Accountancy 111 61.3%

BSBA in Marketing Management 34 18.8%

 BSBA in Financial Management 19 10.5%

BS in Management Accounting 14 7.7%

BS in Digital Business and Analytics 3 1.7%

Total 181 100%

Year Level

1st Year 38 21.0%

2nd Year 34 18.8%

3rd Year 71 39.2%

4th Year 38 21.0%

Total 181 100%

Monthly Family Income

Below ₱10,000 11 6.1%

₱10,000 - ₱20,000 26 14.4%

₱20,001 - ₱40,000 65 35.9%

₱40,001 - ₱70,000 36 19.9%

₱70,001 - ₱100,000 19 10.5%

₱100,001 - ₱200,000 10 5.5%

₱200,001 and above 14 7.7%

Total 181 100%

Table 2 above shows that the majority of respondents were aged 20 and below,

constituting 51.4% of the sample, followed closely by those aged between 21 to 25,
comprising 47.5%. Only a small proportion, 1.1%, fell into the category of 26 years and

above. In terms of gender, the sample was predominantly female, making up 68.0%, while

males constituted 32.0%. Regarding academic program, the most common program was

BS in Accountancy, accounting for 61.3%, followed by BSBA in Marketing Management

at 18.8%. The distribution across year levels varied, with the highest percentage in the 3rd

year at 39.2%, followed by 1st year and 4th year at 21.0% each, and 2nd year at 18.8%.

When examining monthly family income, the largest group fell within the ₱20,001 -

₱40,000 bracket, representing 35.9% of the sample, followed by ₱40,001 - ₱70,000 at

19.9%. The smallest income bracket was ₱100,001 - ₱200,000, accounting for only 5.5%,

while 6.1% reported an income below ₱10,000.

 Research Question # 2: How may the level of life and health insurances awareness of the

respondents be described in terms of:

2.1. Personal Perception

Table 3. Mean and Standard Deviation Interpretation of the Personal Perception on the
Life and Health Insurances

Personal Perception Mean Std. Interpretation Rank

Dev.

I believe that having life and health 3.75 0.52 Strongly Agree 1
insurances are important for financial
security.

I understand the plans of life and health 3.49 0.60 Strongly Agree 3
insurances.

I am aware that life and health insurances 3.09 0.69 Agree 5

are affordable.

I am aware that it is easy to obtain life and 3.15 0.68 Agree 4

health insurance policies.

I am aware of the benefits of life and 3.51 0.59 Strongly Agree 2

health insurances.

Overall Mean 3.40 0.62 Strongly Agree

Table 3 above shows the level of awareness among the respondents regarding life

and health insurance, described in terms of Personal Perception. For the first rank, the

respondents expressed strong agreement (mean = 3.75, SD = 0.52) with the importance of

having life and health insurance for financial security. This indicates widespread

recognition among them regarding the significance of these insurance policies. Following

this, in the second rank, there was strong agreement among the respondents with being
aware of the benefits (mean = 3.51, SD = 0.59) associated with life and health insurance,

indicating a robust understanding of the advantages these policies offer. Furthermore, they

tended to strongly agree (mean = 3.49, SD = 0.60) that they understand the plans associated

with life and health insurance, which falls under the third rank. Similarly, they agreed

(mean = 3.15, SD = 0.68) that obtaining these insurance policies is relatively easy, though

with a similar level of uncertainty as their perception of affordability, which falls under the

fourth rank. Lastly, respondents generally agreed (mean = 3.09, SD = 0.69) with the notion

that life and health insurance are affordable, albeit with a slightly lower level of certainty,

which falls under the fifth rank. In summary, the level of awareness among the respondents

regarding life and health insurance, described in terms of Personal Perception, has an

overall mean score of 3.40 with a standard deviation of 0.62, interpreted as strongly agree.

This aligns with Varlyani and Bharti’s (2022) study entitled “Study on the Attitude

of Working Youth Towards Health Insurance”, where participants showed positive

attitudes and perceptions towards health insurance, recognizing its importance for both

themselves and their health.

2.2. Benefits, and

Table 4. Mean and Standard Deviation Interpretation of the Benefits on the Life and Health

Insurances

Benefits Mean Std. Interpretation Rank

Dev.

Life and health insurances often provide 3.47 0.59 Strongly Agree 3
better coverage for my entire family.

Life and health insurances can cover 3.52 0.57 Strongly Agree 2
personal accidents.

Health insurance reduces the risk of 3.61 0.54 Strongly Agree 1

incurring high medical expenses.

Life and health insurances can provide me 3.22 0.71 Agree 5

with tax benefits.

Life and health insurances protect me 3.28 0.67 Strongly Agree 4

against loss of wealth.

Overall Mean 3.42 0.62 Strongly Agree

Table 4 above shows the level of awareness among the respondents regarding life

and health insurance, described in terms of Benefits. For the first rank, they strongly agreed

(mean = 3.61, SD = 0.54) with the idea that health insurance can mitigate the risk of facing

high medical expenses, underscoring the perceived financial security provided by these

policies in times of medical need. Following this, in the second rank, respondents strongly

agreed (mean = 3.52, SD = 0.57) with the notion that life and health insurance can cover

personal accidents, suggesting confidence in the protective capabilities of these policies

against unforeseen events. Furthermore, they strongly agreed (mean = 3.47, SD = 0.59)

that these insurance policies often offer better coverage for their entire family, which falls
under the third rank. Additionally, they strongly agreed (mean = 3.28, SD = 0.67) that these

insurances protect against the loss of wealth, albeit with slightly less certainty compared to

other benefits, which falls under the fourth rank. Lastly, respondents agreed (mean = 3.22,

SD = 0.71) that life and health insurance can provide them with tax benefits, indicating a

slightly less robust understanding or perception of the tax-related advantages associated

with these policies. This falls under the fifth rank. In summary, the level of awareness

among the respondents regarding life and health insurance, described in terms of Benefits,

has an overall mean score of 3.42 with a standard deviation of 0.62 or interpreted as

strongly agree.

These findings align with the study of Vethirajan (2019), suggesting that the

understanding of health insurance benefits might apply more broadly than just the group

studied in the table. This indicates that the patterns observed in the table are likely reflective

of a larger trend. Vethirajan’s study study also shows that being aware of benefits of health

insurance contributes to the general awareness of college students.

2.3. Source of Information?

Table 5. Mean and Standard Deviation Interpretation of the Sources of Information on

the Life and Health Insurances

Sources of Information Mean Std. Interpretation Rank

Dev.

My family and friends are a primary 3.17 0.77 Agree 3

source of information regarding life and
health insurances.

Health care providers, such as doctors, 3.29 0.69 Strongly Agree 2

hospitals, clinics, or pharmacists are
reliable sources of information about
life and health insurances.

Insurance sources, such as health plans, 3.45 0.59 Strongly Agree 1

health insurance marketplaces, and
health insurance navigators provide
valuable insights about life and health
insurances.

Fellow students are a reliable source of 2.80 0.80 Agree 5

information about life and health
insurances.

Media sources and entertainers, such as 2.92 0.79 Agree 4

celebrities/sports figures are trustworthy
sources of information about life and
health insurances.

Overall Mean 3.13 0.73 Agree

Table 5 above shows the level of life and health insurances awareness of the

respondents be described in terms of Sources of Information. For the first rank, they

strongly agreed that insurance sources (mean = 3.45, SD = 0.59) are reliable sources,

indicating trust in professional expertise and formal channels for obtaining information
about life and health insurances. Following this, in the second rank, respondents also

strongly agreed that health care providers (mean = 3.29, SD = 0.69) are reliable sources.

This suggests a recognition of the credibility of information provided by healthcare

professionals regarding insurance options and benefits. Furthermore, they agreed (mean =

3.17, SD = 0.77) that their family and friends serve as primary sources of information,

which falls under the third rank. This suggests a reliance on interpersonal networks for

insights into these insurance matters. Additionally, respondents agree (mean = 2.80, SD =

0.80) with the idea that fellow students are reliable sources, which falls under the fourth

rank. Lastly, they also expressed agreement (mean = 2.92, SD = 0.79) in media sources

and entertainers as trustworthy sources of information about life and health insurances,

which falls under the fifth rank. In summary, the level of life and health insurances

awareness of the respondents be described in terms of Sources of Information has an

overall mean score of 3.13 with standard deviation of 0.73 or interpreted as agree.

Similar to the findings of Vethirajan (2019), insurance agents, which fall under the

category of insurance sources, ranked first as the prominent source of information among

college students.
Research Question # 3: How may the level of insurance literacy of the respondents?

3.1. Knowledge,

Table 6. Mean and Standard Deviation Interpretation of the Knowledge on the Life and

Health Insurances

Knowledge Mean Std. Interpretation Rank

Dev.

I am aware that insurance protects 3.49 0.60 Strongly Agree 1

people from financial risks.

I have knowledge of insurance. 3.33 0.55 Strongly Agree 2

I am aware of the different types of 3.09 0.70 Agree 4

insurance policies.

I know where to buy insurance. 3.13 0.71 Agree 3

I easily understand insurance policies. 3.09 0.68 Agree 4

Overall Mean 3.23 0.65 Agree

Table 6 above shows the level of insurance literacy of the respondents in terms of

Knowledge. For the first rank, they strongly agreed (mean = 3.49, SD = 0.60) with the

statement that insurance protects individuals from financial risks, suggesting a widespread

understanding of the fundamental purpose of insurance in providing financial security.

Following this, in the second rank, respondents strongly agreed (mean = 3.33, SD = 0.55)

that they possess knowledge about insurance, indicating a self-assessment of their

familiarity with insurance concepts and practices. Furthermore, they exhibited slightly less

confidence in their awareness of knowing where to purchase insurance (mean = 3.13, SD

= 0.71), which falls under the third rank. Similarly, with a tied fourth ranking, respondents

agreed that they are aware of the different types of insurance policies (mean = 3.09, SD =
0.70) and agreed (mean = 3.09, SD = 0.68) that they easily understand insurance policies.

This suggests a need for further education or clarification in these areas. In summary, the

level of insurance literacy of the respondents in terms of Knowledge has an overall mean

score of 3.23 with standard deviation of 0.65 or interpreted as agree.

3.2. Skills, and

Table 7. Mean and Standard Deviation Interpretation of the Skills on the Life and Health
Insurances

Skills Mean Std. Interpretation Rank

Dev.

I can compare various insurance policies 2.94 0.72 Agree 4

and choose the best alternative.

I have the ability to find an insurance 3.05 0.69 Agree 1

policy that suits my needs.

I can evaluate the affordability of an 3.04 0.71 Agree 2

insurance policy for myself.

I have the ability to make a personal 2.85 0.81 Agree 5

insurance plan.

I understand how to read and interpret 3.03 0.67 Agree 3

insurance policy documents effectively.

Overall Mean 2.98 0.72 Agree

Table 7 above shows the level of insurance literacy of the respondents in terms of

Skills. In the first rank, respondents agreed (mean = 3.05, SD = 0.69) that they can find an

insurance policy that suits their needs, suggesting a belief in their capability to navigate the

insurance market effectively. Following this, in the second rank, they agreed (mean = 3.04,

SD = 0.71) with their ability to evaluate the affordability of insurance policies for
themselves, indicating a sense of financial awareness and assessment. Furthermore, they

agreed (mean = 3.03, SD = 0.67) that they understand how to read and interpret insurance

policy documents effectively, which falls under the third rank. This indicates a level of

proficiency in comprehending insurance-related literature. Additionally, they agreed

(mean = 2.94, SD = 0.72) that they possess the ability to compare various insurance policies

and select the best alternative, which falls under the fourth rank. Lastly, respondents

expressed agreement (mean = 2.85, SD = 0.81) in their ability to create a personal insurance

plan, which falls under the fifth rank. In summary, the level of insurance literacy of the

respondents in terms of Skills has an overall mean score of 2.98 with standard deviation of

0.72 or interpreted as agree.

3.3. Attitude?

Table 8. Mean and Standard Deviation Interpretation of the Attitude on the Life and Health
Insurances

Attitude Mean Std. Interpretation Rank

Dev.

I have a positive opinion about 3.48 0.57 Strongly Agree 5

insurance.

I like the insurance policies because 3.51 0.51 Strongly Agree 3

of the advantages they provide.

I think insurance is good for me. 3.56 0.54 Strongly Agree 1

I think insurance is beneficial to me. 3.53 0.59 Strongly Agree 2

I would be content if I could purchase 3.50 0.53 Strongly Agree 4

personal health insurance.

Overall Mean 3.52 0.55 Strongly Agree

Table 8 above shows the level of insurance literacy of the respondents in terms of

Attitude. In the first rank, they strongly agreed (mean = 3.56, SD = 0.54) that they perceive

insurance to be good for them, underscoring the perceived value and utility of insurance in

their lives. Following this, in the second rank, respondents strongly agreed that insurance

is beneficial to them. Furthermore, respondents strongly agreed (mean = 3.51, SD = 0.51)

that they like insurance policies due to the advantages they provide, indicating a strong

appreciation for the benefits associated with insurance coverage, which falls under the third

rank. Additionally, respondents strongly agreed (mean = 3.50, SD = 0.53) that they would

be content if they could purchase personal health insurance, which falls under the fourth

rank. This reflects a desire for access to this form of coverage. Lastly, they also strongly
agreed (mean = 3.48, SD = 0.57) with the statement that they hold a positive opinion about

insurance, which falls under the fifth rank. In summary, the level of insurance literacy of

the respondents in terms of Attitude has an overall mean score of 3.52 with standard

deviation of 0.55 or interpreted as strongly agree.

Furthermore, insurance literacy was measured in terms of knowledge, skills,

attitude and behaviour as suggested by Weedige et al. (2019). However, the researchers

chose to exclude the behavior aspect from their analysis, opting to focus solely on the

awareness itself. To compare the results with a relevant study by Waters et al. (2022),

entitled “I Thought There Would Be More I Understood: Health Insurance Literacy Among

Adolescent and Young Adult Cancer Survivors,” their findings shows that most of their

participants reported that they had very low health insurance literacy, which in contrary of

what the researchers’ findings. Overall, while respondents demonstrated a moderate level

of insurance literacy in terms of knowledge and skills, their attitude towards insurance was

highly positive.
Research Question # 4: Is there a significant relationship between the level of life and

health insurances awareness of the respondents and their insurance literacy?

Ho1: There is no significant relationship between the level of life and health insurances

awareness of the respondents and their insurance literacy.

Table 9. Correlation Analysis of Life and Health Insurances Awareness and Insurance

Literacy

Variables Pearson p-value Interpretation Decision Remarks

R

Personal Knowledge 0.601 < 0.001 Moderate Reject Ho Significant

Perception
Skills 0.563 < 0.001 Moderate Reject Ho Significant

Attitude 0.598 < 0.001 Moderate Reject Ho Significant

Benefits Knowledge 0.610 < 0.001 Moderate Reject Ho Significant

Skills 0.543 < 0.001 Moderate Reject Ho Significant

Attitude 0.653 < 0.001 Moderate Reject Ho Significant

Sources of Knowledge 0.462 < 0.001 Moderate Reject Ho Significant

Information
Skills 0.484 < 0.001 Moderate Reject Ho Significant

Attitude 0.427 < 0.001 Moderate Reject Ho Significant

Reject Ho if p < 0.05

0 = No Correlation / 0.2 = Weak / 0.5 = Moderate / 0.8 = High / 1.0 = Perfect

Table 9 above shows that the level of life and health insurances awareness in terms

of Personal Perception has significant positive relationship to respondents’ insurance

literacy in terms of Knowledge (R = 0.601, p < 0.001), Skills (R = 0.563, p < 0.001), and

Attitude (R = 0.598, p < 0.001) at 0.05 level of significance. Thus, as level of life and health

insurances awareness in terms of Personal Perception increases, respondents’ insurance

literacy also increases.

Also, the level of life and health insurances awareness in terms of Benefits has

significant positive relationship to respondents’ insurance literacy in terms of Knowledge

(R = 0.610, p < 0.001), Skills (R = 0.543, p < 0.001), and Attitude (R = 0.653, p < 0.001)

at 0.05 level of significance. Thus, as level of life in terms of Benefits and health insurances

awareness increases, respondents’ insurance literacy also increases.

Lastly, the level of life and health insurances awareness in terms of Sources of

Information has significant positive relationship to respondents’ insurance literacy in terms

of Knowledge (R = 0.462, p < 0.001), Skills (R = 0.484, p < 0.001), and Attitude (R =

0.427, p < 0.001) at 0.05 level of significance. Thus, as level of life in terms of Sources of

Information and health insurances awareness increases, respondents’ insurance literacy

also increases.

To support these findings, according to “Financial Literacy, Insurance, and

Investment Ownership in the Philippines”, a study by Desello (2022), financial literacy,

which encompasses insurance literacy, plays a significant role in fostering insurance

awareness. Thus, it reveals that a higher level of awareness about life and health insurance

correlates positively with respondents’ insurance literacy across multiple dimensions,

including knowledge, skills, and attitudes.

Research Question # 5: Is there a significant difference in the level of life and health

insurances awareness when the respondents are grouped according to their profile?

Ho2: There is no significant difference in the level of life and health insurances awareness

when the respondents are grouped according to their profile.

Table 10. Test of Difference (Personal Perception)

Demographic Profile Mean SD F-value p-value Decision Remarks

Age 20 and below 3.35 0.46 1.370 0.257 Accept Not

Ho Significant
21 to 25 3.45 0.48

26 and above 3.10 0.14

Academic BS in 3.43 0.43 1.490 0.207 Accept Not

Program Accountancy Ho Significant

BSBA in 3.28 0.59

Marketing
Management

BSBA in 3.54 0.45

Financial
Management

BS in 3.34 0.55
Management
Accounting

BS in Digital 3.07 0.12

Business and
Analytics

Year Level 1st Year 3.37 0.42 1.120 0.342 Accept Not
Ho Significant
2nd Year 3.28 0.39

3rd Year 3.45 0.53

4th Year 3.43 0.48

 Monthly Below 3.29 0.50 0.860 0.523 Accept Not
Family ₱10,000 Ho Significant
Income
₱10,000 - 3.40 0.42
₱20,000

₱20,001 - 3.36 0.44

₱40,000

₱40,001 - 3.45 0.47

₱70,000

₱70,001 - 3.34 0.67

₱100,000

₱100,001 - 3.34 0.50

₱200,000

₱200,001 and 3.63 0.39

above

Demographic Profile Mean SD t-value p-value Decision Remarks

Sex Female 3.43 0.49 1.27 0.208 Accept Not

Ho Significant
Male 3.33 0.44

Reject Ho if p < 0.05

Table 10 above shows that the level of life and health insurances awareness in terms

of Personal Perception has no significant difference when grouped according to age (F =

1.370, p = 0.257), Academic Program (F = 1.490, p = 0.207), Year Level (F = 1.120, p =

0.342), Monthly Family Income (F = 0.860, p = 0.523), and Sex (t = 1.270, p = 0.208) at

0.05 level of significance. Thus, respondents’ level of life and health insurances awareness

in terms of Personal Perception are the same across different demographic profile.
Table 11. Test of Difference (Benefits)

Demographic Profile Mean SD F-value p-value Decision Remarks

Age 20 and below 3.41 0.50 1.700 0.186 Accept Not

Ho Significant
21 to 25 3.44 0.48

26 and above 2.80 0.00

Academic BS in 3.45 0.45 1.360 0.250 Accept Not

Program Accountancy Ho Significant

BSBA in 3.28 0.57

Marketing
Management

BSBA in 3.54 0.44

Financial
Management

BS in 3.40 0.61
Management
Accounting

BS in Digital 3.13 0.76

Business and
Analytics

Year 1st Year 3.41 0.49 1.050 0.374 Accept Not

Level Ho Significant
2nd Year 3.34 0.42

3rd Year 3.49 0.54

4th Year 3.35 0.48

Monthly Below ₱10,000 3.24 0.57 1.740 0.114 Accept Not

Family Ho Significant
Income ₱10,000 - 3.32 0.45
₱20,000

₱20,001 - 3.39 0.45

₱40,000
 ₱40,001 - 3.49 0.50
₱70,000

₱70,001 - 3.46 0.62

₱100,000

₱100,001 - 3.28 0.58

₱200,000

₱200,001 and 3.73 0.31

above

Demographic Profile Mean SD t-value p-value Decision Remarks

Sex Female 3.43 0.50 0.34 0.738 Accept Not

Ho Significant
Male 3.40 0.48

Reject Ho if p < 0.05

Table 11 above shows that the level of life and health insurances awareness in terms

of Benefits has no significant difference when grouped according to age (F = 1.700, p =

0.186), Academic Program (F = 1.360, p = 0.250), Year Level (F = 1.050, p = 0.374),

Monthly Family Income (F = 1.740, p = 0.114), and Sex (t = 0.340, p = 0.738) at 0.05 level

of significance. Thus, respondents’ level of life and health insurances awareness in terms

of Benefits are the same across different demographic profile.

Table 12. Test of Difference (Sources of Information)

Demographic Profile Mean SD F-value p-value Decision Remarks

Age 20 and below 3.08 0.48 1.960 0.145 Accept Not

Ho Significant
21 to 25 3.19 0.55

26 and above 2.60 0.00

Academic BS in 3.16 0.49 1.500 0.204 Accept Not

Program Accountancy Ho Significant

BSBA in 2.97 0.61

Marketing
Management

BSBA in 3.20 0.52

Financial
Management

BS in 3.24 0.52
Management
Accounting

BS in Digital 2.80 0.53

Business and
Analytics

Year 1st Year 3.12 0.53 0.840 0.471 Accept Not

Level Ho Significant
2nd Year 3.02 0.53

3rd Year 3.19 0.49

4th Year 3.12 0.57

Monthly Below ₱10,000 3.26 0.42 1.460 0.194 Accept Not

Family Ho Significant
Income ₱10,000 - ₱20,000 3.06 0.44

₱20,001 - ₱40,000 3.11 0.50

₱40,001 - ₱70,000 3.04 0.60

 ₱70,001 - 3.15 0.51
₱100,000

₱100,001 - 3.02 0.56

₱200,000

₱200,001 and 3.47 0.51

above

Demographic Profile Mean SD t-value p-value Decision Remarks

Sex Female 3.13 0.52 0.03 0.974 Accept Not

Ho Significant
Male 3.12 0.53

Reject Ho if p < 0.05

Table 12 above shows that the level of life and health insurances awareness in terms

of Sources of Information has no significant difference when grouped according to age (F

= 1.960, p = 0.145), Academic Program (F = 1.500, p = 0.204), Year Level (F = 0.840, p

= 0.471), Monthly Family Income (F = 1.460, p = 0.194), and Sex (t = 0.030, p = 0.974) at

0.05 level of significance. Thus, respondents’ level of life and health insurances awareness

in terms of Sources of Information are the same across different demographic profile.

The findings presented indicate that there is no significant difference in the level of

awareness regarding life and health insurance across various demographic profiles. These

profiles include age, academic program, year level, monthly family income, and sex. In

other words, regardless of these demographic factors, respondents appear to have similar

levels of awareness regarding life and health insurance when considering different aspects

such as personal perception, benefits, and sources of information.

These results might seem to contradict a study conducted by Netra and Rao (2019),

entitled “A Study on Awareness, Coverage and Willingness to Avail Health Insurance

among the Residents of A Rural Area in Central Karnataka.” The study by Netra and Rao
suggested a significant association between education, socioeconomic status, and

awareness of health insurance. However, the current findings do not support such

associations.

Research Question # 6: Is there a significant difference in the level of insurance literacy

of the respondents when they are grouped according to their profile?

Ho3: There is no significant difference in the level of insurance literacy of the respondents

when they are grouped according to their profile.

Table 13. Test of Difference (Knowledge)

Demographic Profile Mean SD F-value p-value Decision Remarks

Age 20 and below 3.17 0.55 1.490 0.228 Accept Not

Ho Significant
21 to 25 3.29 0.47

26 and above 3.00 0.00

Academic BS in 3.30 0.49 1.630 0.168 Accept Not

Program Accountancy Ho Significant

BSBA in 3.12 0.55

Marketing
Management

BSBA in 3.10 0.55

Financial
Management

BS in 3.07 0.52
Management
Accounting

BS in Digital 3.13 0.12

Business and
Analytics
 Year 1st Year 3.13 0.54 1.170 0.323 Accept Not
Level Ho Significant
2nd Year 3.15 0.49

3rd Year 3.30 0.54

4th Year 3.25 0.44

Monthly Below ₱10,000 3.04 0.59 1.640 0.140 Accept Not

Family Ho Significant
Income ₱10,000 - 3.08 0.49
₱20,000

₱20,001 - 3.22 0.49

₱40,000

₱40,001 - 3.32 0.53

₱70,000

₱70,001 - 3.30 0.53

₱100,000

₱100,001 - 3.04 0.53

₱200,000

₱200,001 and 3.47 0.48

above

Demographic Profile Mean SD t-value p-value Decision Remarks

Sex Female 3.23 0.51 -0.02 0.985 Accept Not

Ho Significant
Male 3.23 0.52

Reject Ho if p < 0.05

Table 13 above shows that the level of insurance literacy in terms of Knowledge

has no significant difference when grouped according to age (F = 1.490, p = 0.228),

Academic Program (F = 1.630, p = 0.168), Year Level (F = 1.170, p = 0.323), Monthly

Family Income (F = 1.640, p = 0.140), and Sex (t = -0.020, p = 0.985) at 0.05 level of
significance. Thus, respondents’ level of insurance literacy in terms of Knowledge are the

same across different demographic profile.

Table 14. Test of Difference (Skills)

Demographic Profile Mean SD F-value p-value Decision Remarks

Age 20 and below 2.90 0.62 1.770 0.172 Accept Not

Ho Significant
21 to 25 3.07 0.58

26 and above 3.00 0.00

Academic BS in 2.97 0.59 0.300 0.880 Accept Not

Program Accountancy Ho Significant

BSBA in 2.93 0.76

Marketing
Management

BSBA in 3.10 0.52

Financial
Management

BS in 3.06 0.47
Management
Accounting

BS in Digital 3.13 0.12

Business and
Analytics

Year 1st Year 2.92 0.56 1.710 0.166 Accept Not

Level Ho Significant
2nd Year 2.81 0.56

3rd Year 3.07 0.61

4th Year 3.03 0.64

Monthly Below ₱10,000 2.91 0.56 1.920 0.080 Accept Not

Family Ho Significant
Income ₱10,000 - 2.84 0.44
₱20,000
 ₱20,001 - 2.98 0.54
₱40,000

₱40,001 - 3.00 0.70

₱70,000

₱70,001 - 2.86 0.82

₱100,000

₱100,001 - 2.96 0.49

₱200,000

₱200,001 and 3.46 0.47

above

Demographic Profile Mean SD t-value p-value Decision Remarks

Sex Female 2.97 0.61 -0.38 0.702 Accept Not

Ho Significant
Male 3.01 0.58

Reject Ho if p < 0.05

Table 14 above shows that the level of insurance literacy in terms of Skills has no

significant difference when grouped according to age (F = 1.770, p = 0.172), Academic

Program (F = 0.300, p = 0.880), Year Level (F = 1.710, p = 0.166), Monthly Family Income

(F = 1.920, p = 0.080), and Sex (t = -0.038, p = 0.702) at 0.05 level of significance. Thus,

respondents’ level of insurance literacy in terms of Skills are the same across different

demographic profile.
Table 15. Test of Difference (Attitude)

Demographic Profile Mean SD F-value p-value Decision Remarks

Age 20 and below 3.54 0.50 1.220 0.298 Accept Not

Ho Significant
21 to 25 3.51 0.47

26 and above 3.00 0.00

Academic BS in 3.59 0.45 2.410 0.051 Accept Not

Program Accountancy Ho Significant

BSBA in 3.38 0.59

Marketing
Management

BSBA in 3.54 0.45

Financial
Management

BS in 3.40 0.48
Management
Accounting

BS in Digital 3.00 0.00

Business and
Analytics

Year 1st Year 3.55 0.48 0.510 0.679 Accept Not

Level Ho Significant
2nd Year 3.55 0.46

3rd Year 3.53 0.53

4th Year 3.43 0.43

Monthly Below ₱10,000 3.26 0.44 1.810 0.099 Accept Not

Family Ho Significant
Income ₱10,000 - 3.46 0.41
₱20,000

₱20,001 - 3.51 0.47

₱40,000

₱40,001 - 3.64 0.44

₱70,000
 ₱70,001 - 3.44 0.65
₱100,000

₱100,001 - 3.36 0.59

₱200,000

₱200,001 and 3.74 0.35

above

Demographic Profile Mean SD t-value p-value Decision Remarks

Sex Female 3.51 0.50 -0.34 0.732 Accept Not

Ho Significant
Male 3.53 0.45

Reject Ho if p < 0.05

Table 15 above shows that the level of insurance literacy in terms of Attitude has

no significant difference when grouped according to age (F = 1.220, p = 0.298), Academic

Program (F = 2.410, p = 0.051), Year Level (F = 0.510, p = 0.679), Monthly Family Income

(F = 1.810, p = 0.099), and Sex (t = -0.340, p = 0.732) at 0.05 level of significance. Thus,

respondents’ level of insurance literacy in terms of Attitude are the same across different

demographic profile.

The findings of the study conducted by Bongini, Doriana, and Soana (2023) entitled

“Insurance holdings: Does individual insurance literacy matter?” contradict the results

obtained in the current study. While Bongini, Doriana, and Soana (2023) suggest that

conventional socio-demographic factors such as age, gender, marital status, education,

employment status, and homeownership significantly affect financial literacy, including

insurance literacy, the current study found no significant differences in insurance literacy

levels across various demographic profiles, including age, academic program, year level,

monthly family income, and sex.

 CHAPTER IV

SUMMARY, CONCLUSION, AND RECOMMENDATIONS

Summary of the Findings

The study explored the levels of awareness and literacy regarding life and health

insurance among respondents, focusing on personal perceptions, benefits, sources of

information, as well as knowledge, skills, and attitudes related to insurance. The study

investigated the demographic profile and levels of awareness regarding life and health

insurance, as well as insurance literacy among respondents from the Baliuag University’s

College of Business Administration and Accountancy. The demographic profile revealed

a majority of young respondents, predominantly female, enrolled in Accountancy and

Marketing Management programs, with a significant portion having a monthly family

income between ₱20,001 to ₱40,000. In terms of awareness, respondents demonstrated a

generally positive perception of life and health insurance, acknowledging their importance,

benefits, and sources of information.

Based on the findings of the study, it indicates that the level of awareness of life

and health insurance among respondents is high in terms of personal perception with an

overall mean of 3.40 and benefits with an overall mean of 3.42. Respondents mostly agreed

that insurance sources, such as health plans, health insurance marketplaces, and health

insurance navigators, provide valuable insights about life and health insurance, with a mean

of 3.45. Furthermore, the findings reveal that respondents exhibited a moderate level of

insurance literacy, particularly in knowledge with an overall mean of 3.23 and attitude

aspects with an overall mean of 3.52, showing a positive disposition towards insurance.
 Significantly, the study found a positive relationship between awareness of life and

health insurance and insurance literacy across particular aspects mentioned above.

However, no significant differences were observed in insurance awareness and literacy

levels across different demographic profiles, contradicting previous studies suggesting

associations between socio-demographic factors and insurance literacy.

Targeted insurance literacy programs could be developed to address specific areas

where respondents showed varying levels of understanding. These programs could

emphasize reinforcing positive perceptions and educating individuals on the benefits of

insurance coverage while also highlighting the importance of accessing reliable

information sources such as health plans, insurance concepts, and marketplaces.

Emphasizing the positive relationship between awareness and literacy, the programs could

highlight the value of staying informed about insurance options and requirements.

Ultimately, the goal would be to empower individuals with the knowledge and skills

needed to make informed decisions and promote financial stability through adequate

insurance coverage.

Conclusion

In conclusion, this study provides insight on the levels of awareness and literacy

regarding life and health insurance among students at Baliuag University’s College of

Business Administration and Accountancy. The findings indicate that while there is

generally positive awareness and a moderate level of literacy regarding insurance among

the respondents, there is still room for improvement.

Despite the lack of significant differences across demographic profiles, the study

highlights the need for targeted insurance literacy programs to address specific areas where
respondents may require further education. By emphasizing the value of staying informed

about insurance options and requirements, these programs aim to empower individuals to

make informed decisions and promote financial stability through adequate insurance

coverage. Furthermore, it is imperative to continue researching and implementing

strategies that enhance insurance literacy, ensuring that individuals can navigate the

complexities of insurance effectively and secure their financial well-being. Empowering

individuals with the knowledge and skills to understand insurance products enables them

to make informed decisions that can significantly impact their financial well-being in the

long term.

Recommendations

Based on the findings and discussions presented above, the following suggestions

are being proposed:

1. Students are recommended to:

● Actively engage with the integrated curriculum modules dedicated to

insurance literacy within the College of Business Administration and

Accountancy. By embracing these modules, students can acquire essential

knowledge about insurance concepts and applications, thus enhancing their

understanding of financial risk management.

● Participate in interactive workshops, seminars, and guest speaker sessions

led by insurance professionals to gain practical insights and real-world

examples.

2. Professors are recommended to:

 ● Utilize the findings of this research as a teaching resource to enrich their

courses. By incorporating case studies and reference materials related to

insurance literacy, professors can make their classes more relevant and

engaging for students.

3. Financial advisors and Insurance companies are recommended to:

● Leverage the perspectives and needs of students in the fields of Business

Administration and Accountancy. By understanding the insights provided

by this study, financial advisors can tailor their services and advice to better

meet the requirements of this demographic.

● Engage with students through workshops, seminars, and internship

opportunities, providing valuable guidance and support in navigating the

complexities of the insurance landscape.

● Collaborate with educational institutions and industry associations to offer

internships and insurance industry talks to students. By forging partnerships

and engaging with students early in their academic careers, insurance

companies can gain valuable market insights and cultivate potential future

customers.

● Design targeted outreach programs to educate students about the benefits of

insurance, thereby expanding their customer base and enhancing industry

growth.

4. Future researchers are recommended to:

● Build upon the findings of this study and explore similar topics in greater

depth. By leveraging this research as a foundation, future researchers can

 design comprehensive studies that delve into specific aspects of insurance

literacy within the context of business education.

● Utilize a variety of research methodologies and to collaborate with industry

professionals to ensure the relevance and applicability of their findings in

addressing the evolving needs of students, professors, financial advisors,

and insurance companies.

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