We examine how long-term life insurance contracts can be designed to incorporate uncertain future bequest needs. An … individual who buys a life insurance contract early in life is often uncertain about the future financial needs of his or her …. We derive two equivalent long-term life insurance contracts that are incentive compatible and achieve a higher welfare …

competitive economy in which some markets are inefficient due to asymmetric information. As in most insurance markets, consumers … from the standard formula. The general analysis is applied to the optimum taxation of annuities and life insurance. …