Determinants of Life Insurance Purchase Intention using Structured Equation Modelling with Focus on Saving Motive and Financial Literacy

Abstract

Life insurance serves as an important financial instrument, which effectively safeguards the family against adverse financial consequences resulting from an untimely demise of the primary breadwinner. This research paper delves into the factors that impact the purchasing intentions of life insurance among married working professionals. Employing Structural Equation Modelling (SEM), the study analyses the impact of saving motives and financial literacy on life insurance purchasing intentions. The findings suggest that saving motives and financial literacy have a positive and significant effect on the purchase intention of life insurance. Furthermore, the paper demonstrates that incorporating continuous manifest variables enhances the model fit and provides more accurate estimates of the relationships between variables. This provides valuable insights for life insurance providers, enabling them to gain a better understanding of the factors influencing consumers’ purchase intentions.

DOI: https://doi.org/10.21863/ijbri/2024.12.2.009

Keywords: Life Insurance, Purchase Intention, Precautionary, Bequest, Wealth Accumulation

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