What may be a consequence of lower disposable income due to inflation?

Lower disposable income resulting from inflation leads to individuals having less money available for discretionary spending. As household budgets tighten, consumers often prioritize essential expenses over non-essential purchases. Insurance products, particularly protection insurance, may fall into the latter category for many individuals.

When disposable income decreases, consumers tend to reassess their financial commitments and may opt to reduce or eliminate expenditures deemed non-essential. Protection insurance, which is designed to provide financial security against risks such as illness, accident, or death, may be viewed as a lower priority in times of financial strain. As a result, demand for such insurance products may decline, reflecting a broader trend where individuals focus on immediate needs rather than long-term financial protection.

This relationship between disposable income and demand for insurance highlights how economic factors influence consumer behavior, particularly regarding financial products that are viewed as less urgent in challenging economic climates.