Insurance Europe

What is financial and insurance literacy?

Financial and insurance literacy is the knowledge, skills and confidence people need to understand money and insurance, so they can 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 often developed through financial education, which helps people build the knowledge and skills they need to understand money and make informed choices.

Insurance literacy is an essential part of this. It means understanding why insurance exists, 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 more easily.

Together, financial and insurance literacy describe the basic capabilities people need to make informed decisions 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. Yet many people feel uncertain or overwhelmed when faced with these choices. This can affect their 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 delay important decisions. Problems often only become clear when something goes wrong — for example, when an unexpected event is not covered as expected or when long-term planning has been put off for too long.

Stronger financial and insurance literacy helps people make better choices, manage risks more effectively and plan ahead with confidence. It supports financial resilience for individuals and helps build trust in financial systems and economic stability across Europe.

Literacy, saving and investing

People save and invest in different ways. This can include keeping money in a bank account, investing in capital markets, or using long-term products offered by insurers. Financial literacy helps people understand these options and see how they relate to their goals, time horizons and tolerance for risk.

An important part of this is understanding long-term saving and investment choices, especially when planning for retirement. Insurers usually work with long time horizons and offer solutions designed to support people over many years. These often combine 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 options work and how they fit alongside other ways of saving and investing.

With stronger financial and insurance literacy, people are better able to compare different options, understand the balance between risk and return, and make choices that reflect their life plans rather than focusing only on short-term outcomes or familiar products.

Evidence shows that these challenges are real. Insurance Europe’s 2025 Pension Survey shows that many Europeans are still underprepared for retirement. A large share do not contribute to any supplementary pension scheme, even though they recognise the importance of saving for the future. This gap between awareness and action shows why practical knowledge and confidence matter when making long-term financial decisions.

This link between literacy, saving and investing is also recognised at EU level. The EU Financial Literacy Strategy is part of the Savings and Investments Union, an EU initiative aimed at helping people make better use of their savings and supporting investment in the European economy. It reflects the view that people can only take part confidently in long-term saving and investment if they understand their choices. Strengthening financial and insurance literacy therefore supports both individual financial security and wider economic resilience across Europe. Financial and insurance literacy remains relevant across economic cycles and at different stages of life, making it a long-term priority rather than a one-off policy issue.

What young people think

Many young people still feel uncertain about their financial futures, despite the importance of financial and insurance literacy. This is reflected in a joint survey by Insurance Europe and the European Youth Parliament, which shows 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, insurance is often seen as something that only matters later in life, rather than something that can be useful from a young age. Confidence levels are also low. Only a small minority of respondents said they had received enough education in school to make informed financial and insurance decisions.

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

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

Encouraging open conversations helps build confidence, makes it easier to ask questions and supports a better understanding of how insurance fits into everyday financial choices. Financial and insurance education can help by providing clear information and practical tools that support people of all ages at different stages of life.

How insurers support financial literacy

Creating space for open conversations about money and insurance takes more than awareness alone. People also need 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 financial and insurance education initiatives that support 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 to support everyday financial decisions, and programmes that help adults understand long-term planning, risk and protection. Together, they reflect the idea that financial and insurance literacy is not learned once, but develops over time as people’s lives and responsibilities change.

Insurance Europe’s Consumer Hub brings together examples of these initiatives from across Europe. It shows how insurers support financial understanding in practice and help people build confidence around money and insurance decisions.

EXPLORE INDUSTRY INITIATIVES

#InsureWisely campaign

Building on this long-standing commitment, Insurance Europe and its members focus on raising awareness of risk, insurance and long-term saving for retirement. These topics help people understand how insurance works in everyday life and how it can support financial security over time.

Since 2018, this work has been brought together under the #InsureWisely campaign. The campaign explains financial and insurance concepts in clear, accessible formats such as short videos, booklets and infographics, making them easier to understand for different audiences.

Member associations across Europe use and adapt these materials as part of their national financial literacy activities. This helps ensure the content is relevant to local contexts and reaches people at different stages of life.

Practical resources to build confidence

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

These resources are short, practical tools that can be used on their own or alongside wider financial education initiatives.

Activities

Global Money Week

European Retirement Week

Partnership EYP