Search Results (19)

This study evaluates the utility derived by policyholders in a Danish pension company, from their life insurance coverages. We quantify the relative importance policyholders assign to their existing coverages versus a hypothetical complete coverage scenario, thereby measuring the implicit priority of their current coverage. By analyzing these implicit priorities based on individual attributes such as age, financial situation, and company agreement limitations, we gain a comprehensive understanding of policyholders’ evaluations of their current life insurance coverage. Utilizing a continuous-time life cycle model, we optimize consumption and life insurance decisions during the accumulation phase, applying well-established theoretical findings to actual data. Our analysis identifies trends, outliers, and insights that can inform potential improvements in life insurance coverage. This tool aims to assist policyholders in prioritizing their coverage according to their life situations and provides a foundation for advisory dialogues and product development. Full article

This paper explores optimal consumption and investment strategies for agents facing mortality risk within a complete financial market. Departing from traditional frameworks, we leverage state-dependent utility theory, discounted by the state–price process, to compare consumption streams and utilize life insurance as a strategic hedging instrument. To model the ability of insurance companies to hedge the mortality risk of consumer pools, we introduce the concept of life insurance completeness, allowing individuals to achieve optimal consumption even in scenarios involving negative wealth. Our model relaxes the stringent integrability conditions commonly imposed in the literature, offering a more economically grounded approach to valuation and hedging. We derive a general solution to the optimization problem using martingale techniques under minimal assumptions, demonstrating that life insurance primarily serves as a mortality risk hedge rather than a bequest motive. This perspective resolves longstanding theoretical and empirical challenges, notably the annuity puzzle, by illustrating that optimal consumption and investment, in the absence of labor income, do not necessitate annuities or other life insurance policies. Our key contributions include (1) extending valuation frameworks to encompass prepaid insurance and less restrictive integrability criteria, (2) establishing life insurance completeness for effective mortality risk hedging, (3) demonstrating the feasibility of optimal consumption under negative wealth and state-dependent preferences, and (4) offering a resolution to the annuity puzzle that aligns with empirical observations. Full article

This paper aims to examine the determinants of life insurance consumption in 30 OECD countries using panel data from 1996 to 2020. This study uses GDP per capita, Life expectancy, Urbanization, School education, and Health expenditure as the determinants to measure the OECD countries’ life insurance consumption. Insurance density is used as a proxy for life insurance consumption. Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), and causality tests are applied in this study. Our empirical results revealed that the variables urbanization, school education, and GDP per capita significantly impact life insurance consumption, whereas life expectancy and health expenditure were found to have an insignificant relationship in estimating life insurance consumption. These findings will help all insurance industry stakeholders in OECD countries in policy formulation and decision making. Full article

A household consumption and optimal portfolio problem pertinent to life insurance (LI) in a continuous time setting is examined. The family receives a random income before the parents’ retirement date. The price of the risky asset is driven by the exponential Ornstein–Uhlenbeck (O-U) process, which can better reflect the state of the financial market. If the parents pass away prior to their retirement time, the children do not have any work income and LI can be purchased to hedge the loss of wealth due to the parents’ accidental death. Meanwhile, utility functions (UFs) of the parents and children are individually taken into account in relation to the uncertain lifetime. The purpose of the family is to appropriately maximize the weighted average of the corresponding utilities of the parents and children. The optimal strategies of the problem are achieved using a dynamic programming approach to solve the associated Hamilton–Jacobi–Bellman (HJB) equation by employing the convex dual theory and Legendre transform (LT). Finally, we aim to examine how variations in the weight of the parents’ UF and the coefficient of risk aversion affect the optimal policies. Full article

The scientific debate about sustainability in the agricultural sector is growing worldwide, especially thanks to the increasing awareness of customers towards the impact of their consumption behaviors. While a great deal of attention is given to the economic and environmental dimensions of sustainability, social sustainability assessment often focuses on the quality of life of farmers and the local community; the dimension regarding occupational health and safety (OHS) is not so analyzed even if the agricultural sector could be evaluated as one of the most hazardous ones all over the world. From this point of view, workers are considered high-risk groups mainly due to the presence of hazardous equipment and chemicals. The aim of this work is to propose a cross-analysis developed on public databases reporting data about injuries in the Italian agricultural sector—provided by the Italian National Institute for the Insurance of Work-Related Injuries (INAIL)—in order to point out the main sources and causes that led to these injuries. The injury analysis will allow companies as well as institutions to define more effective prevention strategies to increase the social sustainability levels of this sector. Even if results are limited to the Italian sector, they could outline some directions for improving social sustainability levels as well as research gaps and possible future research directions in order to prevent injuries in the agricultural sector. Full article

This paper studies the dynamically optimal consumption, investment and life-insurance strategies for a wage earners under inside information and inflation. Assume that the wage earner can invest in a risk-free asset, a risky asset and an inflation-indexed bond and that the wage earner can obtain some additional information on the risky asset from the financial market. By maximizing the expected utility of the wage earner’s consumption, inheritance and terminal wealth, we obtain the dynamically optimal consumption, investment and life-insurance strategies for the wage earner. The method of this paper is mainly based on (dynamical) stochastic control theory and the technique of enlargement of filtrations. Moreover, sensitivity analysis is carried out, which reveals that a wage earner with inside information tends to increase his/her consumption and investment, while reducing his/her purchase of life insurance. Full article

Pension plans play a vital role in the economy by impacting savings, consumption, and investment allocation. Despite declining mortality rates and increasing life expectancy, pension enrollment remains low, affecting the long-term financial stability and well-being of populations. To address this issue, this study was conducted to explore the potential of predictive modeling techniques in improving pension participation. The study utilized three tree-based machine learning algorithms and a logistic regression classifier to analyze data from a nationally representative 2019 Kenya FinAccess Household Survey. The results indicated that ensemble tree-based models, particularly the random forest model, were the most effective in predicting pension enrollment. The study identified the key factors that influenced enrollment, such as National Health Insurance Fund (NHIF) usage, monthly income, and bank usage. The findings suggest that collaboration among the NHIF, banks, and pension providers is necessary to increase pension uptake, along with increased financial education for citizens. The study provides valuable insight for promoting and optimizing pension participation. Full article

The number of people suffering from diabetes in Taiwan has continued to rise in recent years. According to the statistics of the International Diabetes Federation, about 537 million people worldwide (10.5% of the global population) suffer from diabetes, and it is estimated that 643 million people will develop the condition (11.3% of the total population) by 2030. If this trend continues, the number will jump to 783 million (12.2%) by 2045. At present, the number of people with diabetes in Taiwan has reached 2.18 million, with an average of one in ten people suffering from the disease. In addition, according to the Bureau of National Health Insurance in Taiwan, the prevalence rate of diabetes among adults in Taiwan has reached 5% and is increasing each year. Diabetes can cause acute and chronic complications that can be fatal. Meanwhile, chronic complications can result in a variety of disabilities or organ decline. If holistic treatments and preventions are not provided to diabetic patients, it will lead to the consumption of more medical resources and a rapid decline in the quality of life of society as a whole. In this study, based on the outpatient examination data of a Taipei Municipal medical center, 15,000 women aged between 20 and 80 were selected as the subjects. These women were patients who had gone to the medical center during 2018–2020 and 2021–2022 with or without the diagnosis of diabetes. This study investigated eight different characteristics of the subjects, including the number of pregnancies, plasma glucose level, diastolic blood pressure, sebum thickness, insulin level, body mass index, diabetes pedigree function, and age. After sorting out the complete data of the patients, this study used Microsoft Machine Learning Studio to train the models of various kinds of neural networks, and the prediction results were used to compare the predictive ability of the various parameters for diabetes. Finally, this study found that after comparing the models using two-class logistic regression as well as the two-class neural network, two-class decision jungle, or two-class boosted decision tree for prediction, the best model was the two-class boosted decision tree, as its area under the curve could reach a score of 0.991, which was better than other models. Full article

Based on the cross-sectional data of the China household finance survey (CHFS) in 2017, this paper aims to empirically examine the effects of the family life cycle, financial status, and asset portfolio on commercial health insurance demand (breadth and depth) by constructing Probit and Tobit models, respectively. Based on all of the samples, it has been found that family life cycle, family financial status, and family asset portfolio have different influences on the breadth and the depth of health insurance. In terms of the family life cycle, there is an “inverted U-shaped” relationship with the breadth and the depth of health insurance, and the effect is obvious. In terms of family financial status, total household consumption has positive and significant effects on the breadth and depth of health insurance. Total household income and total household debt only have a significant positive impact on health insurance breadth. The total household asset portfolio is only positively correlated with health insurance depth. In terms of the family asset portfolio, the share of real estate assets has a crowding out effect on the breadth and the depth of health insurance. The share of savings assets has no significant effect on the breadth and the depth of health insurance but is positively correlated with the former and negatively correlated with the latter. Both the share of vehicle assets and the share of investment assets only have a significant impact on the breadth of health insurance; however, the positive and negative correlation is different. Based on the sub-samples, it has been found that the breadth and the depth of health insurance vary greatly in the regions and household registration characteristics. Full article

Rural–urban migrants significantly contribute to developing economy, whereas they face high housing prices, rare work opportunities and insufficient consumption. By stimulating the consumption of migrants, their happiness and life satisfaction can increase, regional consumption structural transformation can be stimulated, and economic growth can be boosted. By exploiting the data from the “China Migrants’ Dynamic Survey” (CMDS) conducted by the National Health and Family Planning Commission of China, this study explores the effect of rural–urban migrants’ host identity on their consumption. We measure host city identity by migrants’ sense of belonging in the city. Propensity score matching (PSM), instrumental variable methods (IV), and structural equation modeling (SEM) are adopted to tackle down the potential selection bias and endogeneity concerns. As indicated by the empirical results, host identity significantly impacts rural–urban migrants’ consumption, while regional cultural differences hinder migrants from forming host identity. Compared with those without a host identity, migrants with a host identity, the monthly household consumption increased by 4%, and savings decreased significantly by 1.7%. As revealed by the heterogeneity analysis, the host identity effects are significantly larger for migrants aged over 30 years or for those staying in big cities. The results of SEM show that a one-unit increase in the latent variable of identity will increase the consumption by 5.2%, and education, social insurance, and household registration have a significant effect not only on consumption but also on host identity. The findings of this paper contribute to a comprehensive understanding of the psychological and economic integration of migrants in cities and provide valuable suggestions for city managers and policymakers. Full article

Post retirement, annuities provide a steady stream of income for retirees. However, the annuitization rate is relatively small in the insurance market in many countries around the world. Prior studies have shown that a substandard health status in retirement reduces annuitization due to adverse selection. Recent innovation introduces an enhanced annuity plan where individuals with impaired health are entitled to higher annuity payments. However, this market is less explored in countries other than the UK. This paper aims to study the optimal annuitization rate where both standard and substandard annuity rates are offered in the market. The life cycle model in this paper incorporates multiple health states based on the likelihood of events and quality of life measures. Our framework consists of two important parts. First, we estimate the transition probabilities of all health states in our Markov model using reliable national data. Second, we derive the optimal consumption and annuitization solution to maximize a retiree’s expected lifetime utility given the uncertainty of future health risk. In addition, we also consider the bequest motive in our optimization problem. Our results show that the optimal annuitization is driven by the choice of bequest and risk-aversion parameters, as well as the health status of the annuitant. Whilst the health-dependent utility parameter only affects our results for certain cases. Full article

The investigation of township consumption patterns has become highly significant in order to emphasize the importance of township consumption patterns in economic development and policy formulation. To attain township consumption development in underdeveloped areas is a significant way to meet the general criterion of “rich life” under China’s Rural Revitalization strategy. The primary objective of this study is to evaluate the driving forces that contribute to the development of township consumption in underdeveloped areas such as Gansu Province, China, and then scientifically design and implement a strategy for township consumption development in Gansu, all of which are related to the broader interests of rural revitalization. The study used 1233 township data of Gansu Province, China. The study integrated geographically weighted regression (GWR) and a spatial econometric global (SEG) model for data analysis and interpretation. The integration of these two models can comprehensively capture both spatial heterogeneity and spatial independence concurrently. First, we conducted integrated analyses of GWR and SEG models using consistent settings of spatial weight matrix elements, with GWR focusing on spatial heterogeneity and SEG models on spatial spillover. Second, the permanent resident population, the number of financial institution outlets, the types of townships, and the characteristics of townships had a substantial significant effect on the development of township consumption in Gansu, China. In addition, the ratio of residents with access to basic medical insurance was found to be negatively significant. The revitalization strategy for township consumption in Gansu Province, China should prioritize increasing the permanent resident population of townships, accelerating the development of township urbanization, accelerating the construction of township consumption infrastructures, and strengthening financial support from township financial institutions. Full article

Diabetic foot ulcer (DFU) is one of the common complications of diabetes. DFU can cause a huge medical and financial burden due to infections, compromise the quality of life, and increase the mortality rate in patients. However, the consumption of medical resources for DFU is rarely mentioned. A retrospective cohort study was performed. Data were obtained from the National Health Insurance Research Database of Taiwan, and the prevalence and medical utilization data for DFU in 2001–2015 were extracted, followed by the analysis for high-risk populations. Between 2001 and 2015, there were 7511 new DFU patients. A higher proportion in these patients was male, elderly with a low education level, and low income. Between 2001 and 2015, the prevalence of DFU was 0.5–0.8%, and the number of DFU patients showed stable growth. Every year, 12.6–19.3% and 1.2–7.0% of patients underwent debridement and amputation, respectively. The hospitalization fees increased year on year. Our study showed that the DFU prevalence increased year on year, and the DFU medical expenditure increased. DFU tends to occur in males, patients with low socioeconomic status, low education level, those with multiple comorbidities, and old age. Therefore, DFU care and prevention require the entire healthcare system to jointly formulate a prevention plan. Full article

In this paper, we derive an explicit solution to the utility maximization problem of an individual with mortality risk and subsistence consumption constraint. We adopt an exponential utility for the individual’s consumption and the martingale and duality method is employed. From the explicit solution, we exhibit how the mortality intensity and subsistence consumption constraint affect, separately and together, portfolio, consumption and life insurance purchase. Full article

Purpose: This study aimed to compare health behaviors between the childhood cancer survivors (CCS) and their sibling controls and to examine the pattern of health behaviors of the Hong Kong Chinese CCS and its associations with their health-related quality of life and psychological distress. Methods: A cross-sectional telephone survey was conducted. A total of 614 CCS and 208 sibling controls participated in this study. Patterns of health behaviors including lifestyle behaviors, cancer screening practices, and insurance coverage were compared. Multivariate regression analyses were performed for examining factors associated with health behaviors in CCS. Results: CCS had less alcohol consumption when compared with their sibling controls (adjusted odds ratio (AOR) = 0.65, p = 0.035). The sibling controls were more likely to have cancer screening practices (AOR = 0.38, p = 0.005) and health (AOR = 0.27, p < 0.001) and life insurance coverage (AOR = 0.38, p < 0.001). Among the CCS, those who were male, having a job or higher education, shorter time since diagnosis, and type of cancer suffered were significantly associated with alcohol consumption. Those CCS who were drinkers indicated poorer mental health (p = 0.004) and more psychological distress. Female CCS undertaking cancer screening were more likely to be employed, married/cohabiting, and have received intensive cancer treatment. Conclusion: This study reveals that Chinese childhood cancer survivors are less likely to engage in unhealthy lifestyle behaviors, insurance coverage and cancer screening, when compared with their siblings. Implications for Cancer Survivors: It is crucial for healthcare professionals to identify strategies or target interventions for raising CCS’s awareness of their cancer risks and healthy lifestyle throughout their life. Full article