Life Insurance, Loss Aversion and Temporal Orientation: A Field Experiment and Replication with Young Adults

Abstract

Young individuals rarely seek information about life insurance—a product that offers long-term benefits but that might not motivate a desire to act now. Framing life insurance messaging as a gain in the present (e.g., “ensure your loved ones are protected today”) is thought to motivate younger individuals to seek information about insurance policies. A field experiment with a large, real-world life insurance issuer, and a pre-registered experiment, reveal that loss aversion and temporal orientation tactics can be used to prompt individuals aged 25–49 years to shop for life insurance. But the results also suggest that the superiority of gain frames over loss frames requires positioning the benefits well in the future, despite the need to act now. This study thus contextualizes the realities and practical difficulty of framing financial products in ways that might interest a potentially vulnerable population.

Keywords: life insurance, loss framing, temporal orientation, field experiment

JEL Classification: D91, D03, D14, D1, D03