Insurance Protection, Financial Advisory Awareness and Individual Financial Decision-Making: An Empirical Study of Coverage Adequacy and Investment Behavior

Abstract

Insurance and investment decisions are two closely connected components of personal financial planning. While insurance protects individuals and households against financial uncertainty, investment decisions influence wealth creation, future financial security and the ability to meet long-term goals. Possessing an insurance policy or having access to investment products, however, does not necessarily mean that an individual has adequate financial protection or makes well-informed financial decisions. This study brings together two related empirical perspectives that is insurance protection adequacy and awareness of financial advisory services among individual investors.

The first component examines insurance protection, awareness, purchase considerations, changing life circumstances and the persistence of coverage gaps. Primary data were collected from 206 respondents through a structured questionnaire and analyzed using descriptive statistics, cross-tabulation, Chi-square analysis, ANOVA and factor analysis. The second component examines awareness of financial advisory services and its association with investment decision-making. This study analyzed primary data from 188 individual investors using descriptive statistics, reliability analysis, Chi-square tests, ANOVA, and an independent-samples t-test. The two datasets are treated as separate empirical components because their respondent counts and questionnaires are different. The insurance findings indicate that respondents generally recognise the importance of insurance planning, yet a meaningful proportion remain uncertain about the adequacy of their existing protection. Income was significantly associated with the expected duration of insurance protection, while age was significantly associated with events that trigger insurance reviews. Factor analysis grouped insurance-related perceptions into three dimensions: Insurance Awareness and Financial Responsibility, Insurance Coverage Assessment and Professional Guidance, and Insurance Planning and Decision-Making. The financial-advisory component found that 68.62% of respondents were aware of financial advisory services, 76.06% identified mutual funds as their primary investment product, and 86.17% reported an increase in investment decision confidence after becoming aware of financial advisory services. The independent-samples t-test also showed a statistically significant difference in confidence between aware and unaware respondents.

Taken together, the two studies indicate that financial protection and investment decision-making are not isolated activities. Both require awareness, periodic review, understanding of products, assessment of personal circumstances and access to credible guidance. The findings provide practical implications for financial advisory organizations seeking to move from product-focused interactions towards broader, needs-based financial planning.