The Effect Of Social Interaction On Household Life Insurance Selection Behavior

Social insurance and commercial life insurance are the two main ways for Chinese families to protect themselves against personal risks.In recent years,through continuous improvement and optimization of the social insurance system,full coverage of social medical insurance and social pension insurance has been basically achieved.As an important supplement to social insurance,commercial life insurance,which represents a higher level of protection,has become a powerful tool for families to improve risk prevention in the new era,and is also an important channel for personal risk prevention supported by the state.At present,with the continuous improvement of living standards,the awareness of personal risk protection for families in China has gradually increased,but the participation rate of family commercial life insurance is still at a low level,which to a certain extent hinders the effective stimulation of the development potential of China’s insurance industry.With the advancement of technology and changes in life and work patterns,the influence of social interaction on the economic decision-making behavior of families is increasing.Studying whether social interaction has a positive effect on family life insurance participation and its influencing factors will help stimulate the development potential of commercial life insurance in China and optimize the risk prevention ability of families.At present,domestic and international scholars’ studies on the factors influencing life insurance choice behaviour have mostly focused on individual characteristics and household economic and demographic characteristics,with less attention paid to social factors.Therefore,this study will examine the factors influencing the life insurance choice behaviour of Chinese households from a social interaction perspective.Based on the survey data from the 2019 survey data of the China Household Financial Survey(CHFS),this paper selects whether or not to participate in social pension insurance and social health insurance as the measures of social insurance participation,and conducts an empirical study on the impact of social interaction on household participation in commercial life insurance.Firstly,the impact of social interaction on the choice of commercial life insurance participation is analyzed through a Probit model;secondly,the baseline regression results are tested for robustness by excluding financial practitioner households and replacing the regression model,financial knowledge is used as a mediating variable to study the mechanism of social interaction on the choice process of household commercial life insurance,and the instrumental variable method is selected to deal with the endogeneity issue.Finally,heterogeneity analysis is conducted to investigate the differences in the impact of social interactions on household commercial life insurance participation in terms of differences in educational attainment,differences in asset status,and differences in the East,Middle and West regions.The empirical results show that there is a significant contribution of social interaction to the participation in commercial life insurance,and the regression results are found to be generally robust when logit and OLS models are introduced based on the exclusion of the households of financial practitioners.In addition,considering the problem of endogeneity,this paper introduces the "mean of social interaction of others in the same district and county" as an instrumental variable and builds an IV-Probit model to mitigate endogeneity.The heterogeneity regression shows that the positive effect of social interaction is more pronounced for households with higher education,higher income and in the western region.The research focuses on whether social interaction can significantly promote the participation behaviour of families in life insurance.The research results can provide valuable references to stimulate the demand for commercial life insurance in China,enrich the research on the factors influencing the participation decision of families in life insurance,contribute to the enhancement of families’ awareness of risk protection,provide theoretical support for insurance companies to optimise their development direction,and in turn provide assistance to better improve the construction of China’s multi-level social security system.