How Strong are Bequest Motives? Evidence Based on Estimates of the Demand for Life Insurance and Annuities
62 Pages Posted: 15 Jan 2007 Last revised: 18 Jul 2010
Date Written: April 1989
This paper presents new empirical evidence in support of the view that a significant fraction of total saving is motivated solely by the desire to leave bequests. Specifically, I find that Social Security annuity benefits significantly raise life insurance holdings and depress private annuity holdings among elderly individuals. These patterns indicate that the typical household would choose to maintain a positive fraction of its resources in bequeathable forms, even if insurance markets were perfect. Evidence on the relationship between insurance purchases and total resources reinforces this conclusion.
Suggested Citation: Suggested Citation