Life Insurance, Precautionary Saving and Contingent Bequest

Arbeitspapier

Purchasing life insurance is for the welfare of young children, par-ticularly preteens, who are liquidity constrained. In this paper, we present a life cycle model of life insurance that takes into account the ages of these young beneciaries. We show that, as the child ages, the need for protection is reduced and, consequently, the size of contingent bequest may shrink. The demand for life insurance is positively related to the number, age differentials, living standards, and the time needed to reach adulthood. Also, the breadwinner's life-time uncertainty and the unfairness of the insurance market encourage precautionary saving.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 444

Classification and Topics

• Classification: Wirtschaft
• Subject: Loading factor ; birth order ; actuarial rate of interest ; and the age of independence

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Chang, Fwu-Ranq
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2001

Further information

• Handle: http://hdl.handle.net/10419/75717
• Last update: 10.03.2025, 11:43 AM CET