Author: Yunah Song(Korea Insurance Research Institute)

 By reducing uncertainty about future income or expenses, private insurance can reduce households’ precautionary saving and increase households’ consumption expenditures. This study examines the effects of private insurance using Korean Labor and Income Panel Study Data(2009~2019) and applying a variety of regression models on the panel data. The empirical analysis shows that insurance has a negative effect on saving, with the greatest effect for the lowest-income households. In addition, insurance is positively associated with consumption expenditures only for households with the lowest income and with the highest income.