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A Life Cycle Model with Joint Decisions for Household Life Insurance Demand
Keywords: 5 words maximum
life insurance demand; life cycle model; utility function; heterogeneous agents; joint decision.
Very short description for use in the program to help attendees understand more than a title can describe
We construct a life cycle model of heterogeneous households with wage shocks and mortality shocks to analyze life insurance demand. The demand amount simulated approximates to real data but the demand distribution by age indicates a timing puzzle. Our model suggests financial vulnerability, financial support needed and premium determine life insurance demand. We further study the impact of risk aversion, marital status, mortality shock, wage shock, wealth and the number of children in the model economy on household life insurance demand. This paper also contributes to the understanding of the joint decision of life insurance purchases between couples.
Lead & Corresponding Author
Dr. Ning Wang, Valdosta State University
Job Title
Assistant Professor