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

Alexander Michaelides and Joachim Inkmann ()

No 108, 2011 Meeting Papers from Society for Economic Dynamics

Abstract: 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.

Date: 2011
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Journal Article: Can the Life Insurance Market Provide Evidence for a Bequest Motive? (2012)
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