Insurance Europe

What is financial and insurance literacy?

Financial and insurance literacy refers to the knowledge, skills and confidence people need to understand money and insurance and to make informed choices throughout life.

Financial literacy covers everyday topics such as managing income and expenses, saving, borrowing and planning for the future. It is about understanding key concepts well enough to compare options, assess information and make decisions that reflect individual needs and circumstances.

Insurance literacy is an essential part of this. It relates to understanding what insurance is for, how different types of cover work, and what is included — or excluded — in a policy. This understanding helps people navigate insurance products and their terms with greater clarity.

Together, financial and insurance literacy describe a set of basic capabilities that support informed decision-making about money, risk and protection at different stages of life.

Why it matters

Everyone makes financial decisions — from everyday spending to long-term saving, investing and choosing insurance coverage. Yet many people feel uncertain or overwhelmed when faced with these choices. This uncertainty can affect financial security, long-term planning and peace of mind.

When financial and insurance literacy is low, people are more likely to misunderstand products, underestimate risks or postpone important decisions. Problems often only become visible when something goes wrong — for example, when an unexpected event is not covered as assumed or when long-term planning has been delayed for too long.

Stronger financial and insurance literacy helps people make more informed choices, manage risks more effectively and plan ahead with greater confidence. It supports financial resilience at an individual level and contributes to trust in financial systems and broader economic stability across Europe.

Literacy, saving and investing

Saving and investing can take many forms, from keeping money in a bank account to investing in capital markets or using long-term products offered by insurers. Financial literacy helps people understand these different options and how they relate to their financial goals, time horizons and tolerance for risk.

A key part of this is understanding long-term saving and investment choices, especially when planning ahead for retirement. Insurers typically work with long time horizons and offer solutions designed to support people over many years, often combining saving or investing with protection against risks such as living longer than expected, loss of income or major life events. Financial and insurance literacy helps people understand how these long-term approaches work and how they fit alongside other saving and investment options.

With stronger financial and insurance literacy, people are better able to compare different ways of saving and investing, understand trade-offs between risk and return, and make choices that fit their life plans rather than focusing only on short-term outcomes or familiar products.

Evidence shows that these challenges are not theoretical. Insurance Europe’s 2025 Pension Survey highlights that a significant share of Europeans remain underprepared for retirement, with many not contributing to any supplementary pension scheme despite recognising the importance of saving for the future. This gap between awareness and action underlines why practical knowledge and confidence are essential for turning long-term intentions into informed decisions.

This link between literacy, saving and investing is also reflected at EU level. The EU Financial Literacy Strategy forms part of the EU’s Savings and Investments Union, recognising that people can only participate confidently in long-term saving and investment if they have the knowledge and skills to understand their choices. Strengthening financial and insurance literacy therefore supports both individual financial security and wider economic resilience across Europe.

What young people think

Despite the importance of financial and insurance literacy, many young people still feel uncertain about their financial futures. Findings from a joint survey by Insurance Europe and the European Youth Parliament show that while most young people recognise the value of insurance and understand that even small investments can grow over time, important gaps in understanding remain.

Some misconceptions persist — for example, the belief that insurance is mainly relevant later in life rather than something that can support people from a young age. At the same time, confidence levels are low. Only a small minority of respondents felt they had received enough education in school to make informed financial and insurance decisions.

As a result, many young people enter adulthood without feeling properly prepared to plan ahead, manage risks or make long-term financial choices with confidence. This highlights the need for earlier, clearer and more practical financial and insurance education that reflects the decisions young people are increasingly expected to make.

READ THE SURVEY HERE

Talking about money and insurance

The findings on young people’s views show that gaps in knowledge are often linked to how difficult it can feel to talk openly about money and insurance. Many young people are unsure who to turn to for reliable advice or feel uncomfortable raising financial questions.

Money and insurance are still seen as personal or sensitive topics, which can discourage open discussion. This can lead to delays, misunderstandings or reliance on informal sources, rather than informed decision-making.

Encouraging open conversations helps build confidence, normalises asking questions and makes it easier to understand how insurance fits into everyday financial choices. Financial and insurance education can support these conversations by providing clear information and practical tools that help people of all ages feel more confident and prepared at different stages of life.

How insurers support financial literacy

Creating space for open conversations about money and insurance requires more than awareness alone — it also depends on access to reliable information, practical tools and trusted initiatives. To help turn awareness into confidence and action, insurers across Europe are involved in a wide range of initiatives aimed at strengthening financial and insurance literacy at different stages of life — from school-age education to workplace programmes and adult learning.

These initiatives take many forms. They include classroom materials and workshops for young people, practical tools for consumers making everyday financial decisions, and programmes that support adults in understanding long-term planning, risk and protection. Together, they reflect the view that financial and insurance literacy is not a one-off lesson, but a skill that develops over time as people’s circumstances and responsibilities change.

Insurance Europe’s Consumer Hub brings together examples of these initiatives from across Europe, showing how insurers contribute to improving financial understanding in practice and support people in building confidence around money and insurance decisions.

EXPLORE INDUSTRY INITIATIVES

#InsureWisely campaign

Building on this long-standing commitment, Insurance Europe and its members have focused in particular on raising awareness of risk, insurance and long-term saving for retirement. These topics are central to helping people understand how insurance works in practice and how it can support financial security over time.

Since 2018, this work has been brought together under the #InsureWisely campaign. The campaign brings complex financial and insurance concepts into accessible formats, such as short videos, booklets and infographics, designed to support learning and understanding among different audiences.

Member associations across Europe use and adapt these materials to support their national financial literacy activities, helping ensure that the content is relevant to local contexts and reaches people at different stages of life.

Practical resources to build confidence

Understanding financial and insurance concepts is easier when information is clear, practical and relevant to everyday life. The resources below are designed to help people make more informed choices, manage risks and feel more confident about common insurance and financial decisions — from protecting their home and planning for retirement to travelling safely and navigating advice online.

They are intended as accessible, bite-sized tools that can be used on their own or alongside broader financial education initiatives.

Activities

Global Money Week

European Retirement Week

Partnership EYP