Financial Security and Household Life Insurance

This book offers a comprehensive understanding of a novel approach to household security following the loss of an adult member, introducing the concept of Bridging Household Life Insurance. It addresses the financial and functional instability that families face after the death of a spouse or partner by proposing a new type of insurance that compensates for the loss of unpaid domestic labour, such as caregiving, household management, and other essential non-market activities. Unlike traditional life insurance, the proposed contract focuses not only on income replacement but also on maintaining household stability by covering the cost of services that become necessary due to the loss of a family member's contributions. Thus, it helps ensure continuity in everyday life, reducing the burden on surviving family members and helping them adapt to new circumstances without significant disruptions. The book develops an advanced multistate model that the variability of the household life cycle, not just the future lifetime of the insured persons, which allows for more accurate contract valuation. Comparative analyses across EU countries are used to examine the impact of socio-demographic factors and the COVID-19 pandemic on the premium amount. In addition, the book offers practical recommendations for implementing this insurance on the market and considers its applications in social and demographic policy, national accounts, and the fields of law and economics. The work enriches the existing literature with new tools and concepts that researchers, scholars, actuaries and practitioners can use to manage risk better and protect households against financial instability.