Consumers’ Insurance Literacy

Abstract

Research seeking to understand financial literacy and to enhance it through training or education is receiving greater attention and emphasis from policymakers. Unfortunately, relatively little of this research has focused on insurance products and consumers. This policy brief reviews what is known about consumer knowledge, understanding and capability in insurance markets, focusing on two surveys of consumers’ understanding of insurance policies, terms, and concepts. Insurance disclosures and policy language are discussed in light of this evidence, and suggestions for future insurance literacy research and education are provided.

Keywords: Financial Literacy, Insurance