Research On The Influence Of Financial Literacy On Commercial Insurance Participation

In recent years,China’s commercial insurance market has developed rapidly,and the awareness of families to obtain their own asset preservation and health protection through commercial insurance has begun to awaken,but the actual participation of Chinese families in purchasing commercial insurance is still low,and related scholars explain this problem in terms of family demographic structure and social interaction.In recent years,financial literacy has become an object of study for domestic and foreign scholars,and some scholars have started to study the participation of households in commercial insurance from the perspective of financial literacy,but the research on the influence of financial literacy on commercial insurance participation is still at a preliminary stage of development.Therefore,based on the research of existing scholars,this paper tries to analyze the relationship between financial literacy and the likelihood of purchasing commercial insurance,the degree of participation and the preference of different types of commercial insurance from the perspective of financial literacy.This paper focuses on the influence of financial literacy on the participation behavior of commercial insurance.Firstly,we review the previous literature and find that there are relatively few domestic and foreign articles studying the correlation between financial literacy and commercial insurance participation,and the previous studies mainly focus on the influence of financial literacy on household liabilities,financial planning and asset portfolio,while the studies on commercial insurance mainly focus on household demographic structure and social interaction.The research on commercial insurance has mainly focused on family demographics and social interaction.Therefore,this paper tries to link the two together and explore the influence of financial literacy on commercial insurance participation;secondly,based on the data from the People’s Bank of China and the National Bureau of Statistics,the current situation of financial literacy and commercial insurance development in China is obtained,and the theoretical basis and mechanism analysis involved in this paper are also elaborated;again,based on the data from the 2019 China Household Financial Survey(CHFS)project,three questions based on residents’ The effect of financial literacy on the likelihood of household commercial insurance purchase is examined by using the Probit model,and the effect of financial literacy on the degree of commercial insurance participation is analyzed by using the Tobit model,and heterogeneity analysis,heteroskedasticity,robustness and transmission mechanism tests are conducted.The empirical evidence is consistent with the above.The empirical results show that;(1)the increase in the level of financial literacy significantly increases the likelihood of household residents to purchase commercial insurance;(2)the degree of influence of financial literacy on commercial health insurance and life insurance is greater,indicating that compared with medical insurance,accident insurance,households with high financial literacy are more willing to take out commercial life insurance and health insurance than other insurance such as household property insurance;(3)the transmission mechanism of income,risk attitude,and social interaction as mediating variables holds.Finally,there are targeted suggestions for improving financial literacy levels and improving commercial insurance market development based on the above findings.