The demand for disability insurance

Authors

  • Janine K. Scott Department of Personal Financial Planning, Texas Tech University, Lubbock, TX 79409, USA
  • Michael S. Finke Department of Personal Financial Planning, Texas Tech University, Lubbock, TX 79409, USA

DOI:

https://doi.org/10.61190/fsr.v22i1.4639

Keywords:

Disability insurance, Household finance, Financial advisor, Human capital

Abstract

Disability insurance is a vital hedge against an unexpected loss in human capital, yet less than half of U.S. households own this type of insurance. This article explores factors that affect demand for disability insurance and investigates the impact of financial sophistication and professional financial advice on insurance ownership. Prior research shows that low financial knowledge, behavioral biases, and other barriers to purchase are related to low demand among households. Using the 2007 Survey of Consumer Finances, we find that demand for disability insurance increases with financial sophis­tication, the use of a financial advisor, and proxies for group insurance availability. Results indicate that low demand for disability insurance can be attributed to both demand and supply factors.

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Published

2013-03-31

How to Cite

Scott, J. K., & Finke, M. S. (2013). The demand for disability insurance. Financial Services Review, 22(1), 1–12. https://doi.org/10.61190/fsr.v22i1.4639

Issue

Vol. 22 No. 1 (2013): FSR Spring 2013

Section

New Original Submission

License

Copyright (c) 2013 Academy of Financial Services

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