%0 Journal Article
%T Purchasing Life Insurance to Reach a Bequest Goal
%A Erhan Bayraktar
%A David Promislow
%A Virginia Young
%J Quantitative Finance
%D 2014
%I arXiv
%X We determine how an individual can use life insurance to meet a bequest goal. We assume that the individual's consumption is met by an income, such as a pension, life annuity, or Social Security. Then, we consider the wealth that the individual wants to devote towards heirs (separate from any wealth related to the afore-mentioned income) and find the optimal strategy for buying life insurance to maximize the probability of reaching a given bequest goal. We consider life insurance purchased by a single premium, with and without cash value available. We also consider irreversible and reversible life insurance purchased by a continuously paid premium; one can view the latter as (instantaneous) term life insurance.
%U http://arxiv.org/abs/1402.5300v2