The effect of financial risk acceptance on the purchase of life insurance policies

One of the most important factors that can affect the investor's behavior in buying life insurance is the level of risk aversion of people. The main purpose of this research is to investigate the effect of financial risk acceptance on the purchase of life insurance policies. The current research is based on the classification of the objective in the category of applied research and based on the nature and method of descriptive research, it is correlational. The statistical population of this research consists of people working in small and medium-sized industrial enterprises (industrial workshops in Tehran), whose number was 796. In order to select the sample from simple random sampling and using Cochran's formula, 384 people were selected as the research sample. The required data was collected with the help of a questionnaire. Using the structural equation modeling technique with the partial least squares approach, the effect of financial risk on the use of term life insurance and life and savings insurance was investigated. Composite reliability values and Cronbach's alpha of the model variables were above 0.7. In addition, the root AVE of financial risk 0.861, term life insurance 0.789 and savings life insurance 0.86 was greater than the correlation between all three variables. Based on this, diagnostic validity was confirmed for all three constructs of the model. The fitting of the structural model was done by R2 and Q2 indices. The R2 value of term life insurance and savings life insurance was equal to 0.280 and 0.215, respectively, and the Q2 index for term life insurance and savings life insurance was equal to 0.154 and 0.144, respectively. GoF criterion was used to check the fit of the overall model, which controls both measurement and structural model parts. Obtaining the GoF value equal to 0.417 shows the strong overall fit of the model. The research results showed that the impact of financial risk on term life insurance and savings life insurance is significant at the 95% confidence level. The impact of financial risk on the use of life insurance was found to be 0.529. Considering that the significance level can be expressed with 95% confidence, financial risk has a positive and significant effect on the use of term life insurance. Also, the impact of financial risk on the use of savings life insurance was found to be 0.464. It can be said with 95% certainty that financial risk has a positive and significant effect on the use of savings life insurance.