Consumer Capital Market Constraints and Guaranteed Renewable Insurance

Kevin Frick

doi:10.1023/A:1007707103908

Consumer Capital Market Constraints and Guaranteed Renewable Insurance

Kevin Frick

Carey Business School

Research output: Contribution to journal › Article › peer-review

15 Scopus citations

Abstract

This paper analyzes a market in which individuals can purchase guaranteed renewable insurance policies to insure against the risk of loss in the current period and the risk of an increased probability of loss. Individuals who cannot borrow will purchase partially guaranteed renewable insurance at most. Relatively impatient individuals may purchase policies with no guaranteed renewability features. Without borrowing, the results are similar regardless of whether consumers can save.

Original language	English (US)
Pages (from-to)	271-278
Number of pages	8
Journal	Journal of Risk and Uncertainty
Volume	16
Issue number	3
DOIs	https://doi.org/10.1023/A:1007707103908
State	Published - 1998

Keywords

Capital market constraints
Insurance
Renewability
Subjective rate of time preference

ASJC Scopus subject areas

Accounting
Finance
Economics and Econometrics

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10.1023/A:1007707103908

Cite this

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title = "Consumer Capital Market Constraints and Guaranteed Renewable Insurance",

abstract = "This paper analyzes a market in which individuals can purchase guaranteed renewable insurance policies to insure against the risk of loss in the current period and the risk of an increased probability of loss. Individuals who cannot borrow will purchase partially guaranteed renewable insurance at most. Relatively impatient individuals may purchase policies with no guaranteed renewability features. Without borrowing, the results are similar regardless of whether consumers can save.",

keywords = "Capital market constraints, Insurance, Renewability, Subjective rate of time preference",

author = "Kevin Frick",

note = "Funding Information: I would like to thank Roger Gordon, Richard Hirth, Carl Phillips, Michael Chernew, Ennio Stacchetti, Catherine McLaughlin, participants at the Fifth Northeast Regional Health Economics Research Symposium, and seminar participants at the Johns Hopkins University School of Hygiene and Public Health and Department of Economics for their useful comments. This research was supported by a University of Michigan Rackham Pre-Doctoral Fellowship. Any remaining errors are my own.",

year = "1998",

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language = "English (US)",

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N1 - Funding Information: I would like to thank Roger Gordon, Richard Hirth, Carl Phillips, Michael Chernew, Ennio Stacchetti, Catherine McLaughlin, participants at the Fifth Northeast Regional Health Economics Research Symposium, and seminar participants at the Johns Hopkins University School of Hygiene and Public Health and Department of Economics for their useful comments. This research was supported by a University of Michigan Rackham Pre-Doctoral Fellowship. Any remaining errors are my own.

PY - 1998

Y1 - 1998

N2 - This paper analyzes a market in which individuals can purchase guaranteed renewable insurance policies to insure against the risk of loss in the current period and the risk of an increased probability of loss. Individuals who cannot borrow will purchase partially guaranteed renewable insurance at most. Relatively impatient individuals may purchase policies with no guaranteed renewability features. Without borrowing, the results are similar regardless of whether consumers can save.

AB - This paper analyzes a market in which individuals can purchase guaranteed renewable insurance policies to insure against the risk of loss in the current period and the risk of an increased probability of loss. Individuals who cannot borrow will purchase partially guaranteed renewable insurance at most. Relatively impatient individuals may purchase policies with no guaranteed renewability features. Without borrowing, the results are similar regardless of whether consumers can save.

KW - Capital market constraints

KW - Insurance

KW - Renewability

KW - Subjective rate of time preference

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JF - Journal of Risk and Uncertainty

SN - 0895-5646

IS - 3

ER -

Consumer Capital Market Constraints and Guaranteed Renewable Insurance

Abstract

Keywords

ASJC Scopus subject areas

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