TY  - UNPD
A1  - Gemmo, Irina
A1  - Götz, Martin
T1  - Life insurance and demographic change : an empirical analysis of surrender decisions based on panel data
N2  - Households buy life insurance as part of their liquidity management. The option to surrender such a policy can serve as a buffer when a household faces a liquidity need. In this study, we investigate empirically which individual and household specific sociodemographic factors influence the surrender behavior of life insurance policyholders. Based on the Socio-Economic Panel (SOEP), an ongoing wide-ranging representative longitudinal study of around 11,000 private households in Germany, we construct a proxy to identify life insurance surrender in the data. We use this proxy to conduct fixed effect regressions and support the results with survival analyses. We find that life events that possibly impose a liquidity shock to the household, such as birth of a child and divorce increase the likelihood to surrender an existing life insurance policy for an average household in the panel. The acquisition of a dwelling and unemployment are further aspects that can foster life insurance surrender. Our results are robust with respect to different models and hold conditioning on region specific trends; they vary however for different age groups. Our analyses contribute to the existing literature supporting the emergency fund hypothesis. The findings obtained in this study can help life insurers and regulators to detect and understand industry specific challenges of the demographic change.
T3  - SAFE working paper - 240 
T3  - ICIR Working Paper Series - No. 24 
KW  - Demographic Change
KW  - Life Insurance Surrender
KW  - Liquidity Shock
Y1  - 2019
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/48763
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-487634
UR  - https://ssrn.com/abstract=3230274
IS  - December 2016
PB  - SAFE
CY  - Frankfurt am Main
ER  -