The mismatch between life insurance holdings and financial vulnerabilities: evidence from the Health and Retirement Survey
B. Douglas Bernheim,
Lorenzo Forni,
Jagadeesh Gokhale and
Laurence Kotlikoff
No 109, Working Papers (Old Series) from Federal Reserve Bank of Cleveland
Abstract:
Using data on older workers from the 1992 Health and Retirement Survey, along with an elaborate life-cycle planning model, the authors quantify the effect of each individual's death on the financial status of his or her survivors and the degree to which life insurance holdings moderate these consequences. The average change in living standard that would result from a spouse's death is small, both in absolute terms and relative to the decline that would occur without insurance. However, this average obscures a startling mismatch between insurance holdings and underlying vulnerabilities. For many of the most vulnerable, the amounts purchased are surprisingly small, and for many of the least vulnerable, the amounts are surprisingly large. As a result, uninsured vulnerabilities are quite widespread. The magnitude of these vulnerabilities, as well as the proclivity to address any given degree of vulnerability by purchasing life insurance, vary systematically with individual and household characteristics.
Keywords: Life; insurance; companies (search for similar items in EconPapers)
Date: 2001
New Economics Papers: this item is included in nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)
Downloads: (external link)
https://doi.org/10.26509/frbc-wp-200109 Persistent link
https://www.clevelandfed.org/-/media/project/cleve ... nce-holdings-pdf.pdf Full text (application/pdf)
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:fip:fedcwp:0109
Ordering information: This working paper can be ordered from
DOI: 10.26509/frbc-wp-200109
Access Statistics for this paper
More papers in Working Papers (Old Series) from Federal Reserve Bank of Cleveland Contact information at EDIRC.
Bibliographic data for series maintained by 4D Library ().