Life and Non-Life Insurance Holdings : Does Individual Insurance Literacy Matter?

Using a representative sample of an entire country's population and a measure of insurance literacy developed and validated by an insurance supervisor, this study tests the impact of insurance literacy on the holding of insurance products. We show that insurance literacy influences insurance purchase decisions along with age, marital status, education, employment status, and having children. The greater the literacy, the higher the individual’s participation in the insurance market. Given the lower level of insurance literacy compared to financial literacy, policymakers and institutions must provide more insurance education