Household exposure to COVID‐19 and life insurance holdings

Abstract The COVID‐19 pandemic has resulted in substantial loss of life and economic disruption, leading to a reevaluation of financial planning strategies. This paper examines the relationship between household exposure to COVID‐19 and their life insurance holdings using data from a nationwide household survey in the US. The results indicate that households diagnosed with COVID‐19 are more likely to own life insurance and hold a larger amount of coverage due to the pandemic, with these effects significantly influenced by the bequest motive. Conversely, hospitalization and the death of family members due to COVID‐19 are negatively correlated with life insurance holdings. The implications can inform household and industry decisions to enhance household financial welfare in response to pandemic risks.