Lapse-Based Insurance

• 成果类型: Article
• 署名作者: Gottlieb, Daniel; Smetters, Kent
• 署名单位: University of London; London School Economics & Political Science; University of Pennsylvania
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20160868
• 发表日期: 2021
• 页码: 2377-2416
• 关键词: health-insurance; self-control; plan choice; overconfidence; policies; rates

摘要

Most individual life insurance policies lapse, with lapsers cross-subsidizing non-lapsers. We show that policies and lapse patterns predicted by standard rational expectations models are the opposite of those observed empirically. We propose two behavioral models consistent with the evidence: (i) consumers forget to pay premiums and (ii) consumers understate future liquidity needs. We conduct two surveys with a large insurer. New buyers believe that their own lapse probabilities are small compared to the insurer's actual experience. For recent lapsers, forgetfulness accounts for 37.8 percent of lapses while unexpected liquidity accounts for 15.4 percent.