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Incidental Bequests and the Choice to Self-Insure Late-Life Risks / Lee M. Lockwood.
- Format:
- Book
- Author/Creator:
- Lockwood, Lee M.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w20745.
- NBER working paper series no. w20745
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2014.
- Summary:
- Despite facing significant uncertainty about their lifespans and health care costs, most retirees do not buy annuities or long-term care insurance. In this paper, I find that retirees' saving and insurance choices are highly inconsistent with standard life cycle models in which people care only about their own consumption but match well models in which bequests are luxury goods. Bequest motives tend to reduce the value of insurance by reducing the opportunity cost of precautionary saving. The results suggest that bequest motives significantly increase saving and significantly decrease purchases of long-term care insurance and annuities.
- Notes:
- Print version record
- December 2014.
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