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Life Insurance

Villeneuve, Bertrand (2000), Life Insurance, in Dionne, Georges, Handbook of Insurance, Kluwer Academic Publishers : Boston, p. 901-932

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Type
Chapitre d'ouvrage
Date
2000
Book title
Handbook of Insurance
Book author
Dionne, Georges
Publisher
Kluwer Academic Publishers
Published in
Boston
ISBN
0-7923-7870-9
Number of pages
974
Pages
901-932
Metadata
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Author(s)
Villeneuve, Bertrand cc
Abstract (EN)
This survey reviews the micro-economic foundations of the analysis of life insurance markets. The first part outlines a simple theory of insurance needs based on the life-cycle hypothesis. The second part builds on contract theory to expose the main issues in life insurance design within a unified framework. We investigate how much flexibility is desirable. Flexibility is needed to accommodate changing tastes and objectives, but it also gives way to opportunistic behaviors from the part of the insurers and the insured. Many typical features of actual life insurance contracts can be considered the equilibrium outcome of this trade-off.
Subjects / Keywords
life insurance; life cycle; flexibility; insurance contracts
JEL
D82 - Asymmetric and Private Information; Mechanism Design
D91 - Intertemporal Household Choice; Life Cycle Models and Saving
G22 - Insurance; Insurance Companies; Actuarial Studies