Racial Differences in the Demand for Life Insurance

The objective of this article is to measure racial differences in the proportion of human capital that households protect with life insurance. Using the 2004 Survey of Consumer Finances data, racial differences in two stages of the process are tested, where it is assumed that households must decide...

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Bibliographic Details
Published in:The Journal of risk and insurance 2008-09, Vol.75 (3), p.677-689
Main Authors: Gutter, Michael S., Hatcher, Charles B.
Format: Article
Language:English
Subjects:
Age
Analysis
Automobile insurance
Consumer surveys
Demand
Education
Expenditures
Financial management
Gender differences
Home ownership
Homeowners insurance
Households
Human capital
Insurance coverage
Insurance policies
Investment risk
Life insurance
Liquid assets
Net worth
Preferences
Race
Racial differences
Racial distribution (Demography)
Risk aversion
Studies
Variables
Wives
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Summary:The objective of this article is to measure racial differences in the proportion of human capital that households protect with life insurance. Using the 2004 Survey of Consumer Finances data, racial differences in two stages of the process are tested, where it is assumed that households must decide both whether or not to purchase life insurance and how much of their human capital to insure (if they decide to purchase). Among married and cohabitating households, we find that, controlling for demographics and other factors, there is little difference in life insurance ownership between black and white households but that white households insure a larger proportion of their human capital than black households.
ISSN:0022-4367
1539-6975
DOI:10.1111/j.1539-6975.2008.00279.x