Is "Life Value Theory" Regarding Life Insurance Wrong? Analysis from The Perspective of Division of Traditional and Investment Life Insurance

From the perspective of division of traditional and investment life insurance, this paper re-examines the positive correlation between income and life insurance demand implied in "life value theory". By constructing total life value function, this paper deduces two testable hypothesis: income effect hypothesis and population structure effect hypothesis. With the data on traditional and investment life insurance from 2002-2011 panel data of 30 provinces in China, the estimates from Static Panel GLS model, Two-way model and Dynamic Panel DIF GMM model do not support the income effect hypothesis. It still needs further work to measure the population structure effect.