Insurance literacy is not only a question of whether people have heard of insurance. Recent evidence shows a wider gap between awareness, terminology, policy comprehension and actual protection. Across the OECD/INFE exercise, about 75% of adults knew at least one insurance product, but only about 36% held some type of insurance. In the United States, many consumers expressed confidence in their policies while missing important exclusions, and only about one-quarter felt confident in their life-insurance knowledge. The figures below bring these measures together while keeping each survey’s geography, definition and measurement period explicit.
Contents
- Global awareness and ownership
- Gen Z terminology and confidence
- Home, renters, flood and auto policy knowledge
- Life-insurance knowledge and coverage gaps
- Workplace life-insurance understanding
- Emerging-market literacy and inclusion
Global awareness and ownership
The OECD/INFE 2023 International Survey of Adult Financial Literacy provides broad international context from its 2022–2023 coordinated measurement exercise. Its figures measure financial literacy alongside insurance-product awareness and holding; they should therefore be read as context for insurance literacy rather than as a single standalone insurance-knowledge score.
Across all participating countries and economies, the average financial-literacy score was 60 out of 100. Across participating OECD countries, the average was 63 out of 100. The OECD/INFE minimum financial-literacy target was 70 out of 100, yet only 34% of adults across all participating countries and economies reached it. The corresponding share in participating OECD countries was 39%.
Insurance awareness was more widespread than ownership. Around 75% of adults across participating countries and economies were aware of at least one type of insurance product. More than 75% reached that awareness level in 25 participating countries and economies. By contrast, about 36% of adults across participating countries and economies held some type of insurance product, compared with about 46% across participating OECD countries.
The relationship between financial-product ownership and literacy also leaves room for concern. Only 37% of adults who held any financial product reached the OECD/INFE minimum financial-literacy target, compared with 42% in participating OECD countries. These measures do not prove that low literacy caused low ownership, but they show why awareness, understanding and access should be tracked separately.
| Measure | All participating countries and economies | Participating OECD countries |
|---|---|---|
| Average financial-literacy score | 60/100 | 63/100 |
| Reached 70/100 minimum target | 34% | 39% |
| Held some type of insurance | About 36% | About 46% |
| Financial-product holders reaching minimum target | 37% | 42% |
All figures in this section come from the 2022–2023 coordinated measurement exercise. Percentages are not directly comparable with the U.S., Indonesian or Kenyan studies below because survey populations, years and definitions differ.
Gen Z terminology and confidence
The National Association of Insurance Commissioners report, based on U.S. Gen Z adults surveyed June 24–26, 2024, illustrates how emotional discomfort and vocabulary gaps can coexist with some product use. Fifty-four percent said that dealing with insurance made them feel overwhelmed or anxious. At the same time, 35% said they currently paid for a cellphone protection plan and 21% said they had renters insurance.
Timing may also shape decisions. Thirty-four percent said they would try to wait as long as possible before getting their own life insurance, while 28% said the same about health insurance. These are reported intentions, not forecasts of future purchasing behavior.
Knowledge of common terms was limited. Only 27% said they could correctly identify “deductible,” and 29% could correctly identify “copay.” Thirty-six percent said they could correctly identify “out of pocket,” while 19% could correctly define “out of network.” The same survey found that 22% reported little or no awareness of the importance of auto insurance, and 14% reported little or no awareness of the importance of health insurance.
Together, these figures describe several different dimensions of literacy: the ability to recognize a word, the confidence to deal with insurance and awareness of why coverage matters. They should not be treated as interchangeable measures.
Home, renters, flood and auto policy knowledge
The Insurance Information Institute survey summary, reporting a 2024 U.S. survey on June 19, 2024, found a notable mismatch between confidence and detailed policy knowledge. Eighty-six percent of U.S. respondents said they had a strong grasp of their insurance policies. However, 56% were unaware that a standard homeowners policy does not cover flood damage.
Other exclusions and claim-preparation questions produced similar gaps. Seventy percent did not know that materials or fixtures intended for installation during renovations are not covered by a standard homeowners policy. Forty-six percent did not have, or were unsure whether they had, a home inventory of major household items for a claim.
Auto coverage was also difficult to interpret. Fifty-five percent did not realize that a standard auto policy does not cover business use of a vehicle. Forty-four percent incorrectly believed that personal items stolen from their car were covered by auto insurance. Fifty-seven percent did not know that parking tickets generally do not affect auto-insurance premiums.
These results do not show that every respondent lacked insurance literacy. They show that a broad self-assessment can conceal uncertainty about exclusions, documentation and the boundary between different policies. For readers comparing policies, the practical lesson is to check what a policy excludes and what evidence a claim may require, rather than relying only on the existence of a policy or a general sense of familiarity.
Life-insurance knowledge and coverage gaps
The 2024 Insurance Barometer Study findings summarized by LIMRA show a separate life-insurance pattern in the United States. Seventy percent of U.S. adults said they knew they should have life-insurance coverage, while about 50% reported owning life insurance. Forty-two percent said they needed life insurance or more of it, representing about 102 million adults.
The stated need varied across groups. Forty-nine percent of Black U.S. adults said they needed life insurance or more of it, as did 53% of Hispanic U.S. adults. Forty-five percent of U.S. women said they needed life insurance or more of it, compared with 39% of U.S. men. Coverage ownership also differed by gender: 46% of U.S. women said they had life-insurance coverage, compared with 57% of U.S. men.
Younger adults and lower-income households were also prominent in the reported gaps. More than 54 million younger U.S. adults were described as living with a life-insurance coverage gap. Forty-nine percent of U.S. Gen Z adults said they needed life insurance or more of it. Among U.S. households earning under $50,000 a year, 56% said they needed life insurance or more of it.
Confidence and price perceptions may affect whether people act on that need. Only about 25% of U.S. consumers felt confident in their life-insurance knowledge. Seventy-two percent of Americans overestimated the true cost of a basic term life-insurance policy, and 54% based their estimate on gut instinct or a wild guess. Nearly 50% of U.S. consumers said they would face financial hardship within six months if the primary wage earner died unexpectedly.
The survey’s measures distinguish perceived need, ownership, knowledge confidence and financial resilience. A person can know that coverage matters while still misunderstanding price or having less coverage than they believe their household needs.
Workplace life-insurance understanding
Workplace benefits are an important part of the U.S. life-insurance picture. The LIMRA 2024 Facts About Life — Workplace Benefits fact sheet reports that 53% of U.S. workers had life insurance through their workplace. Sixty-five percent of employed Americans relied on workplace life insurance held by themselves or another family member to meet their life-insurance needs. In the 2023 BEAT Study, 58% of workers said a life-insurance benefit was very or extremely important to them or their families.
Among workers with children under 18, 58% relied on workplace life-insurance coverage to protect their loved ones. Workers with life-insurance coverage were more likely to feel financially secure: 62% felt financially secure, compared with 47% of uninsured workers.
Reliance did not always mean confidence in the amount or the benefit itself. Fifty-six percent of adults with only workplace life insurance believed the amount obtained through work provided enough coverage. Yet 42% of households with only workplace life-insurance coverage said their families would struggle financially within six months after a wage earner’s unexpected death. Only 27% of adults with only workplace life insurance said they were very or extremely knowledgeable about life insurance.
Communication was strongly associated with reported understanding. Seventy-one percent of workers who said their employer communicated benefits extremely well reported high understanding of their life-insurance benefit, compared with 34% among workers who said communication was poor. This association does not establish that communication alone caused the difference, but it highlights the role of clear workplace explanations.
Emerging-market literacy and inclusion
Indonesia’s Roadmap for the Development and Strengthening of the Indonesian Insurance Industry 2023–2027 reports insurance-literacy and insurance-inclusion rates from the 2019 and 2022 SNLIK measurements. Insurance literacy rose from 19.40% in 2019 to 31.72% in 2022. Insurance inclusion rose from 13.15% to 16.63% over the same measurement years. The literacy and inclusion rates are different measures: knowledge or understanding can increase faster than actual use.
Historical Kenyan data summarized in the World Bank report Insurance that Works shows another awareness-to-use gap. More than 80% of Kenyan respondents had heard of insurance in the financial-literacy questions summarized by the report, while insurance use remained below 2% of respondents for most products, except the National Hospital Insurance Fund.
Access and socioeconomic position were associated with reported use in the 2016 Kenya financial-access survey. Forty-one percent of employed Kenyans had insurance, compared with 17% of Kenyans running their own businesses. Insurance use ranged from 2.5% in the lowest wealth quintile to 45% in the highest wealth quintile. The report also says overall financial-sector exclusion fell from close to 40% in 2006 to 17% in the later survey, while insurance use remained strongly segmented by gender, location, education and wealth.
The Kenya figures are historical survey data summarized by the World Bank, not a 2026 estimate. Across these emerging-market examples, the central distinction remains consistent: awareness or literacy can improve without producing equal increases in ownership or use. Measurement dates and definitions matter when interpreting progress.