Academy of Financial Services
Life insurance is commonly used to protect future human capital earnings. Factors related to life insurance ownership is well studied in the literature. Liebenberg, Carson, and Dumm (2012) provided a thorough summary of the variables used in the literature. Using the Health and Retirement Study (HRS) leave behind survey, this study is the first to add behavioral factors, to our knowledge, of spousal relationship as a measurement factor regarding life insurance ownership. For the same reason, this study focuses on life insurance ownership with the spouse as the beneficiary. The results suggest that the quality of relationship quality with the spouse is a strong and dominating factor of life insurance ownership. In other words, most individuals are motivated to protect the spouse from potential premature death. The impact of spousal relationship quality is much larger than traditionally explored objective factors.
Author(s): Yuanshan Cheng, Philip Gibson, Tao Guo, Janine Sam