THE INFLUENCE OF FINANCIAL CAPABILITY, COMPANY REPUTATION, AND PERCEIVED RISK TOWARDS THE PURCHASE OF EDUCATION INSURANCE IN INDONESIA

Abstract

Insurance products evolved as a critical instrument for financial protection during unanticipated economic situations. Despite the low insurance penetration in Indonesia, the uncertain economic condition created a new problem for students' educational pursuits. Education insurance emerged as an instrument to ensure that if there are any financial challenges, it will not impact one's education journey. Using the combination of the Theory of Planned Behavior and Signaling Theory, this research aims to study the influence of financial capability, company reputation, perceived risk, purchase intention, and actual purchase towards education insurance. Data were collected through purposive sampling, yielding 407 responses via an online questionnaire. The analysis conducted with SmartPLS 3, revealed that: (1) financial capability has a negative relationship with purchase intention; (2) company reputation has a positive relationship with purchase intention; (3) perceived risk has a positive relationship with purchase intention; (4) purchase intention has a positive relationship with actual purchase.