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Saving face: a solution to the hidden crisis for life insurance policyholders

Detail Summary
Date 24 May 2019
Time 12:30 - 13:30
Location Roeterseilandcampus - building E
Room E0.08

The total face amount of terminated life insurance in the U.S. amounts to over two trillion dollars per annum. This implies a gigantic windfall profit for insurance carriers, who may keep the premiums paid until termination and avoid the death benefit payout. Little known is that many individuals could realize their policy’s value by selling it in the secondary market in exchange for a lump-sum markedly above the surrender value. We demonstrate how a contract provision requiring a mandatory offer in the secondary market could increase the welfare of policyholders without negatively affecting that of insurance companies.

Roeterseilandcampus - building E

Room E0.08

Roetersstraat 11
1018 WB Amsterdam