The effect of premium framing on life insurance demand

In behavioral economics, framing effect represents a cognitive bias, in which the choice of the decision-maker is influenced by presentation of the decision problem. The specific formulation of the decision frame can thus incite individuals to choose a certain alternative. In the paper, we report preliminary results on the effect of price framing on the life insurance demand. Using the sample of 200 respondents, we test the differences in the attractiveness and demand for life insurance under different premium framing. In the between-subject setting, we identify statistically significant difference in the rating of the life insurance under various price formulations, controlling for socioeconomics characteristics. We do not observe the effect on the life insurance demand.