The adequacy of life insurance: evidence from the health and retirement survey

Bernheim, B. Douglas; Forni, Lorenzo; Gokhale, Jagadeesh; Kotlikoff, Laurence J.

doi:10.26509/frbc-wp-199914

Working Paper

The adequacy of life insurance: evidence from the health and retirement survey

Abstract: This study examines life insurance adequacy among married American couples approaching retirement based on the 1992 Health and Retirement Survey with matched Social Security earnings histories. It evaluates each household's life insurance needs based on new financial planning software that embodies a life-cycle-planning model and covers a broad array of demographic, economic, and financial characteristics. A sizable minority of households are significantly underinsured. Almost one third of wives and over 10 percent of husbands would have suffered living-standard reductions greater than 20 percent had their spouses died in 1992.

Keywords: Insurance; Life insurance companies;

https://doi.org/10.26509/frbc-wp-199914