Stock Return Uncertainty and Life Insurance

Yang Dong, Hao Wang and Lihong Zhang

Mathematical Problems in Engineering, 2020, vol. 2020, 1-14

Abstract:

Knightian uncertainty embedded in stock returns causes rising demand for life insurance, as the uncertainty averse agent seeks alternative investment channels. Life insurance demand of middle-aged agent is more sensitive to the uncertainty. Stock return uncertainty reduces the agent’s total wealth and subsequently the propensity of wealthy agent serving as an insurance seller. Rising demand and falling supply of life insurance imply that life insurance is more expensive in the presence of stock return uncertainty. Sensitivity of life insurance demand to the mortality rate and key stock return characteristics also changes with the uncertainty.

Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
http://downloads.hindawi.com/journals/MPE/2020/1835146.pdf (application/pdf)
http://downloads.hindawi.com/journals/MPE/2020/1835146.xml (text/xml)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hin:jnlmpe:1835146

DOI: 10.1155/2020/1835146

Access Statistics for this article

More articles in Mathematical Problems in Engineering from Hindawi
Bibliographic data for series maintained by Mohamed Abdelhakeem ().