Planned behavior, insurance knowledge and the demand for private disability insurance – Evidence from Germany

Loss of the ability to work is a risk that threatens financial existence, which is often not adequately covered by state benefits. Although in many countries exists a market for occupational disability insurance, private provision is moderate. This study uses Germany as an example to examine the factors that influence consumer demand for private disability insurance from a behavioral perspective. A qualitative-quantitative approach is employed. Based on the Theory of Planned Behavior, semi-structured interviews among insurance sales people are conducted to identify additional factors that are relevant to insurance demand in practice. These factors include perceived usefulness and perceived risk of purchasing private disability insurance, as well as knowledge of disability insurance. The developed research model is then tested quantitatively using a structural equation model. Therefore, data from 323 consumer were collected through an online questionnaire. The results confirm the suitability of the Theory of Planned Behavior for explaining demand for private disability insurance. Of the extended factors derived from the qualitative part, disability insurance knowledge is highly relevant to the consumer purchase decision. These findings can be used to further theorizing in the field of insurance demand behavior. Furthermore, they also provide practical recommendations for increasing demand for disability insurance and thus improving coverage of existential risks.