Threshold Effect of Real GDP on Iran's life Insurance Development: Nonlinear Approach of Smooth Transition Regression Companies

Life insurance in the current world is one of the important tools of the economy and performs various functions. In addition, it plays a central role in protecting family’s future.The objective of the current study is to examine the threshold effect of real GDP on the Iranian life insurance development over the years 1981–2015. We use nonlinear approach of smooth transition regression. The results of this study indicate that the third lag of real GDP has affected insurance densityin a three-regime structure. Real GDP also has a negative impact on side regimes and had a positive impact on insurance density in the intermediate regime. In addition, results show that savings rate and financial development index variables in lateral and middle-income regimes have improved insurance density