Changing Responsibility for Personal Risks and Societal Consequences: Premature Death and Old Age

Abstract

This paper analyzes the changing responsibility for the risks of premature death and old age of a breadwinner. This responsibility is assumed by three groups: the individual, private industry, and the federal government. The trend ap pears to be toward an increasingly important role for govern ment in meeting these risks despite the decreasing public support of and confidence in the Social Security system. On the other hand, the role of the individual in providing for his or her financial security is becoming less and less important in providing the needed resources to offset these risks. With regard to new product development for meeting the risks of premature death and old age, indexed death protection, death protection in terms of real dollars adjusted for life cycle changes, indexed income for retirement, and a geometrically increasing life annuity for survivors are essential to deal with these risks under the cloud of inflation which seems to linger.