ABSTRACT
This chapter focuses on the issue of how households get used to life after the death of an adult member, emphasising the risk of poverty and lifestyle destabilisation. It identifies the key types of losses experienced (lost income, lost personal contribution, and non-economic damages) and presents a method for valuing each. Given that the nature and timing of household services vary over time, this chapter adopts the life-cycle approach from personal finance to illustrate how household decisions and financial conditions evolve depending on age, composition, and the roles of individual members. These dynamics complicate the valuation of losses resulting from the death of a household member.
Building on concepts from life insurance and personal injury compensation, this chapter introduces a new insurance contract: Bridging Household Life Insurance. It is designed to mitigate temporary destabilisation by covering services that were formerly provided by the deceased. The key elements of the contract, including the insured subject, period of coverage, and structure of benefits, are outlined. The proposed contract aims to provide practical and actuarially sound support to households facing the profound disruptions caused by the loss of a key member.
