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Determinants of the Demand for Cash-Value Life Insurance  

Baek Eun-Young (School of Economics, Sungkyunkwan University)
Joung Soon-Hee (Dept. of Consumer Science & Human Development, Ewha Womans University)
Publication Information
Journal of Families and Better Life / v.23, no.3, 2005 , pp. 217-230 More about this Journal
Abstract
The purpose of this study was to examine factors related to the purchase of cash-value life insurance of households. Based on human capital and bequest motive theories of the demand for life insurance, this study developed a conceptual model of the demand for life insurance of households. In addition, in order to capture the beneficiaries' preference and expected lifetime utility, expected future financial needs were included in the conceptual model. Using Heckit analysis, the model was estimated by two stages. The results supported that human capital, bequest motives and expected future financial needs were significant factors on both decision to have insurance and the mont of insurance. Specifically, if the household's head expected to have a higher potential in the future, the household was more likely to have insurance. If a household had dependents, the household was more likely to have insurance. As income or monthly expenditure increased, the probability of haying insurance and the amount of the insurance increased However, savings or social insurance were positively related to the purchase of insurance.
Keywords
human capital; bequest motives; future financial needs; cash-value life insurance;
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Times Cited By KSCI : 1  (Citation Analysis)
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