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Consumer Capital Market Constraints and Guaranteed Renewable Insurance

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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.

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Authors and Affiliations

  1. Department of Health Policy and Management, Health Services Research and Development Center, Johns Hopkins University, School of Hygiene and Public Health, USA

    Kevin Frick

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  1. Kevin Frick
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Frick, K. Consumer Capital Market Constraints and Guaranteed Renewable Insurance. Journal of Risk and Uncertainty 16, 271–278 (1998). https://doi.org/10.1023/A:1007707103908

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  • DOI: https://doi.org/10.1023/A:1007707103908

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