This paper uses the British Household Panel Survey for the years 1996 to 2000 to investigate whether individuals in the UK save for precautionary motives against uncertain medical costs. In particular, we test the hypothesis that those individuals who are not covered by private medical...

This paper studies the effects of health shocks on the demand for health insurance and annuities, precautionary saving, and the welfare implications of public policies in a simple life-cycle model. I show that when the health shock simultaneously increases health expenses and reduces longevity,...