Insurance holdings: Does individual insurance literacy matter?

Using a representative sample 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 in Italy. 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.