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Improving Financial Education and Awareness on Insurance and Private Pensions

image of Improving Financial Education and Awareness on Insurance and Private Pensions

Individuals face an increasing variety of financial risks, including those linked to their retirement. At the same time, public funding has been reduced or is strictly limited in most countries. Private insurance and pensions products therefore play an essential role in social and financial protection. Yet the public might have a low level of awareness of the risks they are exposed to, and lack literacy, knowledge and skills in insurance and private pensions questions and products.

This volume addresses these topical and unexplored issues as part of the ongoing OECD project on financial education. After a comprehensive analysis of the main challenges and presentation of practical solutions, the book highlights good practices, endorsed by OECD governments, to enhance awareness and education on risk, insurance and private pensions issues.

 

 

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Conclusion

In most OECD and non-OECD member countries, current generations are faced or will have to face increased needs for coverage and saving to cope with new and increasing large-scale risks and risks (related to pension, health and savings) that are no longer or less covered by public, collective, corporate or family schemes and solidarity. Against this backdrop, solutions and possibilities offered by insurance market players are attractive. Yet, they require a higher level of awareness, knowledge, understanding and capacity from individuals as they often involve the subscription of sophisticated products from various distributors and may also imply a greater risk-transfer on households. Actually, consumers are often insufficiently literate and ill equipped to be able to properly bear these new responsibilities and make appropriate choices. This relatively poor capability on insurance issues is reflected in surveys’ outcomes, in the case of mis-selling and more worrisome in the potential dramatic consequences of lack or inappropriate coverage when adverse events occur.

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