| This dissertation examines the demand for life insurance in the portfolio of finance assets, using the continuous-time dynamic models. The dissertation studies the relationship between consumption, insurance pay-out and investment portfolio. Within the optimal control framework pioneered by Merton(1969,1971), it uses numerical simulation and Mathematica software to analyze the optimal solution and important parameters.The structure of the dissertation is arranged as follow:In Chapter 2, it considers optimal insurance and consumption rules for a wage earner whose lifetime is random. There is only one riskless security available for investment. Then, it considers the rules in a more complex economic environment which contains both riskless security and risky security. In Chapter 3, it develops a model which studies the demand of innovative life insurance.The conclusions include:Life insurance needs major from bequest motives, and innovative life insurance needs major from value-added motivation for wealth; the "wealth effect" and "income effect" of life insurance, which means the demand for life-insurance decreases with increasing wealth or decreasing future revenue; the demand for innovative life insurance decreases with increasing age of the wage earner and decreasing wealth; Risk-free asset yield, time discount factor, insurance fee will influent the demand for life insurance; risk-free asset yield, risk asset yield will influent the demand for innovative life insurance. |
PDF Full Text Request