Skip to main content
SpringerLink
Log in

Guaranteed Renewability with Group Insurance

  • Published:
Journal of Risk and Uncertainty Aims and scope Submit manuscript

Abstract

This paper investigates a multiple-period level premium insurance policy equilibrium in a model in which loss probabilities increase for a fixed time period for a set of persons buying insurance in a group. We show that a level-premium sequence which induces risk averse persons to become and remain members of the group exists. We also show that the availability of the Medicare program can prevent the emergence of optimal level-premium private group insurance, but that a system of bonuses for remaining in the group can permit optimality to be retained.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Cochrane, J. (1995). “Time Consistent Health Insurance,” Journal of Political Economy 103(3), 445–473.

    Google Scholar 

  • Danzon, P. (1989). “Mandated Employment-based Health Insurance: Incidence and Efficiency Effects,” Leonard Davis Institute of Health Economics, University of Pennsylvania, Philadelphia, PA.

    Google Scholar 

  • Frick, K. (1997). “Consumer Capital Market Constraints and Guaranteed Renewable Insurance,” Journal of Risk and Uncertainty 16, 271–278.

    Google Scholar 

  • Pauly, MV, Kunreuther, H., and Hirth, R., (1995). “Guaranteed Renewability in Insurance,” Journal of Risk and Uncertainty 10, 143–156.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. The Wharton School, Health Care Systems Department, University of Pennsylvania, 201 Colonial Penn Center, 3641 Locust Walk, Philadelphia, PA, 19104-6218

    Mark Pauly

  2. Seminar f¨r Versicherungswissenschaft, Georg-August-University Göttingen, Germany

    Andreas Nickel

  3. The Wharton School, Operations and Information Management, University of Pennsylvania, USA

    Howard Kunreuther

Authors
  1. Mark Pauly
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Andreas Nickel
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Howard Kunreuther
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

About this article

Cite this article

Pauly, M., Nickel, A. & Kunreuther, H. Guaranteed Renewability with Group Insurance. Journal of Risk and Uncertainty 16, 211–221 (1998). https://doi.org/10.1023/A:1007798818929

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1023/A:1007798818929

Search

Navigation