Linguistic-induced life insurance consumption

Abstract

Linguistic research shows that there are differences in how language distinguishes future events from the present. When a language speaker separates the grammatical structure of a language from the future and present, they also separate the future and present in behavior when facing intertemporal choices. In this study, we investigate language induced time perception as a determinant of cross-country life insurance consumption. The evidence demonstrates that life insurance consumption is higher in countries where there is non-obligatory grammatical future tense in language. This result still confirms the language-insuring hypothesis after considering cultural dimensions, alternative language variables, alternative insurance variable and endogeneity problem. To sum up, the results suggest that language featured by future time reference affects speaker’s time perception and life insurance decision. Our evidence also provides implication for life insurer in multinational businesses.