Can the Life Insurance Market Provide Evidence for a Bequest Motive? | Zendy

Joachim Inkmann | Zendy; Alexander Michaelides | Zendy

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Can the Life Insurance Market Provide Evidence for a Bequest Motive?

Author(s) -

Joachim Inkmann,

Alexander Michaelides

Publication year - 2010

Publication title -

ssrn electronic journal

Language(s) - English

Resource type - Journals

ISSN - 1556-5068

DOI - 10.2139/ssrn.1653333

Subject(s) - bequest , actuarial science , business , life insurance , economics , financial economics , political science , law

Using U.K. microeconomic data, we analyze the empirical determinants of participation in the life insurance market. We find that term insurance demand is positively correlated with measures of bequest motives like being married, having children and/or subjective measures of strong bequest motives. We then show that a life-cycle model of life insurance demand, saving and portfolio choice can rationalize quantitatively the data in the presence of a bequest motive. These findings provide evidence supporting the presence of a bequest motive.

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