Is there adverse selection in the life insurance market? Evidence from a representative sample of purchasers

Harris, Timothy F.; Yelowitz, Aaron

doi:10.1016/j.econlet.2014.07.029

Cited by 17 publications

(28 citation statements)

References 6 publications

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“…The two markets differ in that individual market premiums are experience rated with extensive underwriting, while group markets typically have some form of community rating and guaranteed issue. Previous work has focused almost exclusively on the individual market (Cawley and Philipson ; Harris and Yelowitz , ; He , ; Hedengren and Stratmann ). Little attention, however, has been given to the group or employer‐sponsored life insurance (ESLI) market where 39% of households have coverage.…”

Section: Introductionmentioning

confidence: 99%

Nudging Life Insurance Holdings in the Workplace

Harris

Yelowitz

2016

Economic Inquiry

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Using data from a university, we analyze a policy designed to increase employer‐sponsored life insurance. The university increased basic life insurance holdings, which nudged employees with supplemental coverage to have more life insurance. In large part due to inertia, the nudge increased life insurance holdings one‐for‐one for those who could have undone it. Additionally, we find that expanding coverage options significantly increased total life insurance holdings for new hires who were not subject to inertia. These policy changes reduced uninsured vulnerabilities for two‐thirds of employees. Our findings have important policy implications for addressing widespread disparities in life insurance coverage. (JEL D31, G22, D03, J32, J33, J38, H20)

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Section: Introductionmentioning

confidence: 99%

Nudging Life Insurance Holdings in the Workplace

Harris

Yelowitz

2016

Economic Inquiry

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“…Their study uses the Health and Retirement Survey (HRS), which only includes individuals aged 51 to 61 in 1992. Harris and Yelowitz (2014) demonstrate that life insurance demand varies by age and the need for life insurance coverage diminishes as an individual approaches…”

Section: Literature Reviewmentioning

confidence: 99%

Racial disparities in life insurance coverage

Harris

Yelowitz

2017

Applied Economics

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We evaluate the extent to which there are racial disparities in life insurance coverage using multiple years of the Survey of Income and Program Participation between 2001 and 2010. We find that African-Americans hold significantly more life insurance after controlling for other factors, especially employer-sponsored and whole life insurance. We demonstrate that our findings diverge from prior work because we examine all households instead of focusing exclusively on married and cohabitating households. The findings on life insurance coverage and composition imply that earnings shocks due to mortality are not a contributing factor to racial disparities in wealth.

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“…Several recent empirical studies have analyzed issues related to the demand for, and adverse selection in, life insurance in the United States (Cawley and Philipson 1999;He 2009He , 2011Harris and Yelowitz 2014;Hedengren and Stratmann, 2015). Furthermore, mortality risk and demand for life insurance has been analyzed at the international level (Li, Moshirian, Nguyen, and Wee 2007;Gatzert and Wesker 2014).…”

Section: Literature Reviewmentioning

confidence: 99%

“…This data has been used in recent studies on demand for life insurance (Harris and Yelowitz 2014;Hedengren and Stratmann 2015). This nationally representative longitudinal sample is constructed through individual interviews in four-month intervals known as "waves."…”

Section: Datamentioning

confidence: 99%