Insurance Knowledge and Insurance Choice across Generations: A Critical Narrative Review of Literacy, Life-course Needs and Decision Environments

Abstract

Insurance choices require consumers to translate uncertain future losses, contractual exclusions, premiums, deductibles, benefit limits and household constraints into decisions whose quality may not become observable for years. This critical narrative review evaluates how insurance knowledge influences such choices and whether the influence differs across generations. The review integrates evidence from life insurance, health insurance and personal insurance markets, while treating generational labels cautiously because age, historical period and birth cohort are intrinsically entangled. Literature was selected through live searches of accessible scholarly indexes, bibliographic databases and institutional sources, with emphasis on verified peer-reviewed evidence and direct confirmation of bibliographic metadata and Digital Object Identifiers. The synthesis indicates that insurance-specific knowledge is usually associated with greater confidence, information use and, in several settings, insurance ownership or more defensible plan selection. Yet knowledge is neither a universal nor a sufficient predictor. Associations weaken when affordability, household need, product design, institutional rules, advice, trust and behavioural biases dominate the choice environment. Evidence interpreted as a generational effect is frequently consistent with life-course mechanisms: younger adults often combine lower accumulated financial experience with weaker immediate protection needs and constrained resources; middle-aged households commonly face peak dependency, income-replacement and asset-protection needs; older adults possess more experience but may confront declining financial capability and especially complex health-insurance menus. Direct cross-generational insurance evidence remains sparse, geographically concentrated and largely observational. Strong causal claims are therefore unwarranted. The most defensible interpretation is that insurance choice emerges from the interaction of knowledge, capability, need, resources and decision architecture, with age and cohort shaping exposure to each component rather than acting as independent behavioural causes. Future research should prioritise longitudinal age-period-cohort designs, harmonised insurance-literacy measures, field experiments, administrative purchase data and cross-national comparisons that can separate knowledge deficits from structural barriers.