IDEAS home Printed from https://ideas.repec.org/a/taf/uaajxx/v19y2015i3p224-236.html
   My bibliography  Save this article

Purchasing Term Life Insurance to Reach a Bequest Goal: Time-Dependent Case

Author

Listed:
  • Erhan Bayraktar
  • S. David Promislow
  • Virginia R. Young

Abstract

We consider the problem of how an individual can use term life insurance to maximize the probability of reaching a given bequest goal, an important problem in financial planning. We assume that the individual buys instantaneous term life insurance with a premium payable continuously. We allow the force of mortality to vary with time, which, as we show, greatly complicates the problem.

Suggested Citation

  • Erhan Bayraktar & S. David Promislow & Virginia R. Young, 2015. "Purchasing Term Life Insurance to Reach a Bequest Goal: Time-Dependent Case," North American Actuarial Journal, Taylor & Francis Journals, vol. 19(3), pages 224-236, July.
    • Handle: RePEc:taf:uaajxx:v:19:y:2015:i:3:p:224-236
    DOI: 10.1080/10920277.2015.1033107
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/10920277.2015.1033107
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/10920277.2015.1033107?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bayraktar, Erhan & Promislow, S. David & Young, Virginia R., 2014. "Purchasing life insurance to reach a bequest goal," Insurance: Mathematics and Economics, Elsevier, vol. 58(C), pages 204-216.
    2. Erhan Bayraktar & Virginia Young, 2013. "Life Insurance Purchasing to Maximize Utility of Household Consumption," North American Actuarial Journal, Taylor & Francis Journals, vol. 17(2), pages 114-135.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fangyuan Dong & Nick Halen & Kristen Moore & Qinglai Zeng, 2019. "Efficient Retirement Portfolios: Using Life Insurance to Meet Income and Bequest Goals in Retirement," Risks, MDPI, vol. 7(1), pages 1-11, January.
    2. Angoshtari, Bahman & Bayraktar, Erhan & Young, Virginia R., 2015. "Minimizing the expected lifetime spent in drawdown under proportional consumption," Finance Research Letters, Elsevier, vol. 15(C), pages 106-114.
    3. Asaf Cohen & Virginia R. Young, 2015. "Minimizing Lifetime Poverty with a Penalty for Bankruptcy," Papers 1509.01694, arXiv.org.
    4. Landriault, David & Li, Bin & Li, Danping & Li, Dongchen, 2016. "A pair of optimal reinsurance–investment strategies in the two-sided exit framework," Insurance: Mathematics and Economics, Elsevier, vol. 71(C), pages 284-294.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Erhan Bayraktar & David Promislow & Virginia Young, 2014. "Purchasing Term Life Insurance to Reach a Bequest Goal while Consuming," Papers 1412.2262, arXiv.org, revised Feb 2016.
    2. Bayraktar, Erhan & Young, Virginia R., 2016. "Optimally investing to reach a bequest goal," Insurance: Mathematics and Economics, Elsevier, vol. 70(C), pages 1-10.
    3. Landriault, David & Li, Bin & Li, Danping & Li, Dongchen, 2016. "A pair of optimal reinsurance–investment strategies in the two-sided exit framework," Insurance: Mathematics and Economics, Elsevier, vol. 71(C), pages 284-294.
    4. Bayraktar, Erhan & Promislow, S. David & Young, Virginia R., 2014. "Purchasing life insurance to reach a bequest goal," Insurance: Mathematics and Economics, Elsevier, vol. 58(C), pages 204-216.
    5. Chen, An & Ferrari, Giorgio & Zhu, Shihao, 2023. "Striking the Balance: Life Insurance Timing and Asset Allocation in Financial Planning," Center for Mathematical Economics Working Papers 684, Center for Mathematical Economics, Bielefeld University.
    6. Fangyuan Dong & Nick Halen & Kristen Moore & Qinglai Zeng, 2019. "Efficient Retirement Portfolios: Using Life Insurance to Meet Income and Bequest Goals in Retirement," Risks, MDPI, vol. 7(1), pages 1-11, January.
    7. Wei, Jiaqin & Cheng, Xiang & Jin, Zhuo & Wang, Hao, 2020. "Optimal consumption–investment and life-insurance purchase strategy for couples with correlated lifetimes," Insurance: Mathematics and Economics, Elsevier, vol. 91(C), pages 244-256.
    8. Wei Han & Ping Wang & Hongjie Dong, 2020. "Influence of Egoistic and Altruistic Bequest Motives on the Willingness to Participate in Reverse Mortgages in China," Asian Economic Journal, East Asian Economic Association, vol. 34(4), pages 430-463, December.
    9. Angoshtari, Bahman & Bayraktar, Erhan & Young, Virginia R., 2015. "Minimizing the expected lifetime spent in drawdown under proportional consumption," Finance Research Letters, Elsevier, vol. 15(C), pages 106-114.
    10. An Chen & Giorgio Ferrari & Shihao Zhu, 2023. "Striking the Balance: Life Insurance Timing and Asset Allocation in Financial Planning," Papers 2312.02943, arXiv.org.
    11. Huang, Huaxiong & Milevsky, Moshe A., 2016. "Longevity risk and retirement income tax efficiency: A location spending rate puzzle," Insurance: Mathematics and Economics, Elsevier, vol. 71(C), pages 50-62.
    12. Asaf Cohen & Virginia R. Young, 2015. "Minimizing Lifetime Poverty with a Penalty for Bankruptcy," Papers 1509.01694, arXiv.org.
    13. Liang, Xiaoqing & Young, Virginia R., 2018. "Annuitization and asset allocation under exponential utility," Insurance: Mathematics and Economics, Elsevier, vol. 79(C), pages 167-183.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:uaajxx:v:19:y:2015:i:3:p:224-236. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/uaaj .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.