How Does Price Presentation Influence Consumer Choice? The Case of Life Insurance Products

Journal article
(Original article)


Publication Details

Author(s): Huber C, Gatzert N, Schmeiser H
Journal: Journal of Risk and Insurance
Publisher: Wiley-Blackwell
Publication year: 2015
Volume: 82
Journal issue: 2
Pages range: 401-432
ISSN: 0022-4367
Language: English


Abstract


Life insurance is an important product for many individuals, both to protect dependents against the premature death of an income producer and to provide savings in later retirement years. These kinds of products, however, can be quite complex. Regulatory authorities and consumers currently ask for more cost transparency with respect to product components (e.g., risk premium for death benefits, savings premium, cost of investment guarantee) and administration costs. The aim of this article is to measure the effects of different forms of presenting the price of life insurance contract components and especially of embedded investment guarantees on consumer evaluation of those products. The intention is to understand the extent to which price presentation affects consumer demand. This is done by means of an experimental study and by focusing on unit-linked life insurance products. Our findings reveal that contrary to other consumer products, there are no precise effects of “price bundling” and “price optic” on consumer evaluation and purchase intention in the case of life insurance. Consumer experience and price perception, however, yield a significant moderating effect.



FAU Authors / FAU Editors

Gatzert, Nadine Prof. Dr.
Lehrstuhl für Versicherungswirtschaft und Risikomanagement


External institutions with authors

Universität St.Gallen


How to cite

APA:
Huber, C., Gatzert, N., & Schmeiser, H. (2015). How Does Price Presentation Influence Consumer Choice? The Case of Life Insurance Products. Journal of Risk and Insurance, 82(2), 401-432. https://dx.doi.org/10.1111/jori.12026

MLA:
Huber, Carin, Nadine Gatzert, and Hato Schmeiser. "How Does Price Presentation Influence Consumer Choice? The Case of Life Insurance Products." Journal of Risk and Insurance 82.2 (2015): 401-432.

BibTeX: 

Last updated on 2018-10-08 at 23:02