In personal financial planning, life insurance is used as a tool to hedge against a potential loss of income to surviving household members in the event of a breadwinner’s death. However, there are other uses for life insurance including the payment of a debt, the payment of taxes and other expenses associated with transferring wealth, the continuation of a business plan. In addition to their sophisticated structures, life insurance products have high premium costs than other insurance products and are associated with the unpleasant event of death. Researchers focus on the factors driving the demand for life insurance. This study examines the determinants of purchasing life insurance by considering a larger number of factors (e.g. three measures of leaving a bequest), using most recent waves of the RAND HRS panel data, and estimating a fixed-effects logit model.
