Financial literacy and the household participation in commercial insurance: Evidence from China

Utilizing China Household Finance Survey (CHFS) data in 2017, this study examines the influence of financial literacy on household commercial insurance engagement. Empirical findings reveal that higher financial literacy correlates with increased likelihood and expenditure on commercial insurance. Education level and trust in commercial insurance also significantly enhance market participation. The study also discovers that financial literacy interacts with entrepreneurship, positively affecting family insurance purchasing behaviors. Particularly, financial literacy more significantly promotes insurance purchases in less educated families and communities with lower purchasing rates. In conclusion, our research not only contributes to enriching the study on the real effects of financial literacy, but also provides policy guidelines for governments on enhancing household participation in commercial insurance markets.