The Demand for Life Insurance Policy Loans

Journal of Risk and Insurance, Forthcoming

25 Pages Posted: 27 Sep 2007 Last revised: 22 Jun 2016

See all articles by Andre P. Liebenberg

Andre P. Liebenberg

University of Mississippi - School of Business Administration

James M. Carson

University of Georgia

Robert E. Hoyt

University of Georgia - C. Herman and Mary Virginia Terry College of Business

Multiple version iconThere are 3 versions of this paper

Date Written: July 27, 2009

Abstract

Previous research has examined the demand for life insurance policy loans using aggregate policy loan data. In contrast, we use a detailed household survey dataset containing life insurance and policy loan information to alternatively, and in some cases more directly, examine the four hypotheses traditionally associated with policy loan demand. Our research provides the first U.S. evidence (in the post-World War II period) in support of the policy loan emergency fund hypothesis. In particular, we find that the more detailed emergency fund proxies used here reveal a significantly positive relation between loan demand and recent expense or income shocks.

Keywords: Life Insurance, Policy Loans, Emergency Fund Hypothesis, Survey of Consumer Finances

JEL Classification: G22, E50

Suggested Citation

Liebenberg, Andre P. and Carson, James M. and Hoyt, Robert E., The Demand for Life Insurance Policy Loans (July 27, 2009). Journal of Risk and Insurance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1017444

Andre P. Liebenberg (Contact Author)

University of Mississippi - School of Business Administration ( email )

PO Box 3986
Oxford, MS 38677
United States

James M. Carson

University of Georgia ( email )

Athens, GA 30602-6254
United States

Robert E. Hoyt

University of Georgia - C. Herman and Mary Virginia Terry College of Business ( email )

Athens, GA 30602-6255
United States
706-542-4290 (Phone)
706-542-4295 (Fax)

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