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

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  • Joachim Inkmann
  • Alexander Michaelides

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.
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  • Joachim Inkmann & Alexander Michaelides, 2012. "Can the Life Insurance Market Provide Evidence for a Bequest Motive?," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 79(3), pages 671-695, September.
    • Handle: RePEc:bla:jrinsu:v:79:y:2012:i:3:p:671-695
    DOI: j.1539-6975.2011.01455.x
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