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The Impact of Life Insurance Allocation on Household Consumption Expenditure: Evidence from China

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  • Minghao Chen
  • Yueling Xu
  • Bolin Zhu
  • Jiafeng Chen

Abstract

The social norm of “high savings, low consumption†has traditionally constrained the consumption ability of Chinese families. However, life insurance has become an essential component of household financial planning due to the increasing unpredictability of economic growth and rising demand for financial security. This study utilizes PLS-SEM and ANN models, grounded in an expanded Theory of Planned Behavior (TPB), to analyze the impact of life insurance on household consumption expenditures. Based on a survey of 505 Chinese families, the results indicate that life insurance provides both financial and psychological stability. This stability reduces households’ cautious saving tendencies, thereby promoting an increase in consumption expenditures.

Suggested Citation

  • Minghao Chen & Yueling Xu & Bolin Zhu & Jiafeng Chen, 2025. "The Impact of Life Insurance Allocation on Household Consumption Expenditure: Evidence from China," SAGE Open, , vol. 15(3), pages 21582440251, September.
    • Handle: RePEc:sae:sagope:v:15:y:2025:i:3:p:21582440251379059
    DOI: 10.1177/21582440251379059
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