Do We Insure Our Most Valuable Asset, Ourselves? A study of students' insurance habits

Abstract

This thesis is taken a deeper look at risk-taking behaviour regarding insurance choices and the possible explanation for why students expose themselves to the economic risk of becoming disabled. This thesis discusses some of the reasons why anomalies occur in relation to insurance choices. The students’ willingness to purchase disability insurance is investigated by the use of an econometric approach, more specifically a logistic regression. The program used to make the regressions and analysis was Rstudio. The variables, age, education, risk-preferences and the perceived probability of becoming disabled, are all found to have a statistical significant effect on the willingness to purchase disability insurance. Based on the survey I conducted, it is apparent that students have very little knowledge about disability insurance. However, the majority of students became more willing to buy insurance after receiving some fact-based information on disability and disability insurance.