Purchasing Term Life Insurance to Reach a Bequest Goal: Time-Dependent Case

Erhan Bayraktar, S. David Promislow and Virginia R. Young

North American Actuarial Journal, 2015, vol. 19, issue 3, 224-236

Abstract: We consider the problem of how an individual can use term life insurance to maximize the probability of reaching a given bequest goal, an important problem in financial planning. We assume that the individual buys instantaneous term life insurance with a premium payable continuously. We allow the force of mortality to vary with time, which, as we show, greatly complicates the problem.

Date: 2015
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DOI: 10.1080/10920277.2015.1033107

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