Life Insurance: Investment in the Modern Era
This is an industry that does not disclose fundamental information that consumers should know” (Keating 1). This analysis will relate life insurance expenditures as they relate to consumption economics. It will also explore the permanent insurance policies, ones that build cash value over the life of the policy and pay dividends. A conclusion will address the future of purchasing life insurance as an investment.

When it comes to consumption economics, there are two main theories which provide an explanation for the long-term behavior of consumption by consumers. The theories are not competitive, but, instead, accentuate one another. These two theories are the permanent income hypothesis and the life-cycle hypothesis. The permanent income hypothesis was originated by Milton Friedman in the 1950s, and it theorizes that individuals fix their consumption rates based on their permanent or long-term income and not their present level of income. Even though income levels fluctuate this has little impact on consumption behavior. This is because consumers “will save when income is temporarily high, and use this saving to support consumption when income is temporarily low. Thus overall consumption will be generally constant. This is because of diminishing marginal utility of consuming plenty in one time period, whereas by distributing so as to equate consumption over two time periods, the overall utility will be greater”

    Some topics in this essay  
    Social Security | Milton Friedman | LIFE INSURANCE | Silversmith Silversmith | life insurance | CONSUMPTION ECONOMICS | INTRODUCTION Life | Security Americans | Census Bureau | cash value | CITED Consumption | consumption economics | Variable Annuity | permanent insurance | insurance investment | social security | insurance policies | life insurance investment | term insurance | income hypothesis | permanent income | permanent income hypothesis | purchasing life insurance | permanent insurance policies | savings social security |  
    Get Better Grades!  
    Saved Papers  
    Save your essays here so you can locate them quickly!  
"This site rocks! I got an A thanks to you helping with my writers block."
Sara B.
"I was in a real bind and your site helped me to come up with ideas for my paper."
Brian T.
"It's nice to be able to find information so quickly and easily."
Jillian T.
"I enjoy reading other writers papers to get their perspective on things. It makes writing my own paper so much easier."
Cindy A.
"I've used this site for 2 semesters and I'll be back next year for sure!"
Liz R.
Copyright © 1999 - 2014 All Rights Reserved. DMCA