Protective Behavior and Life Insurance

29 Pages Posted: 9 Feb 2024

See all articles by Abigail Hurwitz

Abigail Hurwitz

Hebrew University, Jerusalem Israel

Olivia S. Mitchell

University of Pennsylvania - The Wharton School; University of Pennsylvania - The Wharton School, Pension Research Council; National Bureau of Economic Research (NBER)

Orly Sade

Hebrew University of Jerusalem - Department of Finance

Multiple version iconThere are 2 versions of this paper

Date Written: January 16, 2024

Abstract

We study life insurance market responses to Covid-19 using unique national administrative data from Israel on purchases and cancellations of life insurance policies, and an internet survey of Americans’ life insurance choices, risk attitudes, Covid-19 perceptions, and vaccination behavior. We see no evidence that life insurance purchases or cancellations were consistent with adverse selection during the pandemic, while we do find advantageous selection. Moreover, life insurance policyholders were more likely to get vaccinated, thus taking ex-post preventive action reducing their pandemic risk. Such positive reactive behavior has not been previously reported in the life insurance setting.

Keywords: Life insurance, advantageous selection, adverse selection, preventive behavior, health shocks

JEL Classification: D14, G52, E21, G51

Suggested Citation

Hurwitz, Abigail and Mitchell, Olivia S. and Sade, Orly, Protective Behavior and Life Insurance (January 16, 2024). Wharton Pension Research Council Working Paper No. 2024-01, Available at SSRN: https://ssrn.com/abstract=4721320 or http://dx.doi.org/10.2139/ssrn.4721320

Abigail Hurwitz (Contact Author)

Hebrew University, Jerusalem Israel ( email )

Mount Scopus
Jerusalem, 91905
Israel

Olivia S. Mitchell

University of Pennsylvania - The Wharton School ( email )

Philadelphia, PA 19104-6365
United States

University of Pennsylvania - The Wharton School, Pension Research Council ( email )

3302 Steinberg Hall-Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104-6302
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Orly Sade

Hebrew University of Jerusalem - Department of Finance ( email )

Mount Scopus
Jerusalem, 91905
Israel
972 2 588 3227 (Phone)

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