Demand For Long-term Care Insurance Research Articles

Private Long-Term Care Insurance Ownership in a Simple Choice Environment: Does Financial Literacy Matter?

ABSTRACT We present new evidence on financial literacy and private long-term care insurance (LTCI) ownership in Singapore, where policy intervention has resulted in a highly standardized marketplace with fixed benefit terms and premiums schedules. Using data from the 2018 Singapore Life Panel (N = 6,151), we document that almost half of the adults aged 50 and above in our large community-based sample have private LTCI coverage. We find that that financial literacy significantly increases LTCI demand, notwithstanding a simple choice environment where consumers cannot customize their policies. Furthermore, the importance of financial literacy was borne out through the knowledge aspect rather than financial skills/experience aspects; specifically, each financial knowledge question answered correctly increased the probability of LTCI ownership by 4.4% points on average. Tests for endogeneity between literacy and LTCI ownership reveal no endogeneity bias in the non-instrumented estimates. Overall, these findings underscore these importance of promoting financial education and literacy among consumers in LTCI markets, especially since financial knowledge is expected to play an even more salient role in markets with little or no product standardization.

Insuring longevity risk and long-term care: Bequest, housing and liquidity

We study the impact of housing wealth and individual preferences on demand for annuities and long-term care insurance (LTCI). We build a multi-state lifecycle model that includes longevity risk and health shocks. The preference is represented by a recursive utility function that separates risk aversion and elasticity of intertemporal substitution (EIS). When health shocks are considered, a higher level of risk aversion lowers the annuity demand, while a lower level of the EIS has the opposite effect. The impact diminishes with a weaker bequest motive, more liquid wealth, or access to LTCI, all of which increase the demand for annuities. The presence of home equity can enhance annuity demand, but the enhancement is marginal when LTCI is available. The presence of home equity has a crowding-out effect on LTCI demand, and the effect is strengthened by a lack of bequest motives or a lower degree of risk aversion. The cash poor but asset rich may demand more LTCI coverage than their renter counterparts to preserve bequests. When both life annuities and LTCI are available, we find that the product demand is robust to changes in risk aversion and the EIS, providing insights into product designs that bundle annuities and LTCI.

Analysis of Demand for Long-Term Care Insurance in Wenzhou

In the context of the accelerated aging of Chinese society and the requirements of the Central Economic Work Conference to prevent major risks, this paper explores the long-term care insurance system of Wenzhou based on the data of the seventh census of Wenzhou in 2020, and analyzes the scale of the disabled elderly in Wenzhou, and thus derives the future demand for long-term care, and designs the corresponding contribution scheme while predicting the future cost of long-term care.

Influencing factors of willingness to purchase long-term care insurance for employees in Shenzhen, China

Purpose: In the early stage of Shenzhen's long-term care insurance pilot, the awareness, demand, and purchase intention of Shenzhen residents about long-term care insurance and their influencing factors were investigated to provide a basis for improving the government's long-term care insurance system. Methods: A structured questionnaire survey was carried out on the Shenzhen employee medical insurance participants. Descriptive statistics, Chi-square test, and Order logistic regression were performed. Results: 298 respondents (female 57.7%), filled out the questionnaires. About 73% of the respondents have never heard of long-term care insurance. Respondents’ average demand of long-term care was 3.06, which was the general level. The 161(54%) respondents' willing to purchase long-term care insurance and the main influencing factors of purchase willingness are self-assessment of long-term care possibility, monthly income, annual family income and their willingness to pay for long-term care services. Conclusions: Respondents lack risk awareness and have low awareness of long-term care insurance; their effective demand for long-term care insurance is insufficient, but the demand for long-term care services is specialized and diversified, and their intention to purchase long-term care services is slightly higher than purchase intention of long-term care insurance. Recommendations: Departments at all levels should work together to strengthen the publicity of long-term care insurance to raise awareness among the population, improve the quality of practitioners, and improve the elderly care service system to meet the needs of the specialized and diverse population, and broaden financing channels to deal with the risk that the population is not willing to buy.

Innovation and financial sustainability in China's long-term care insurance: An empirical analysis of the Nantong pilot.

Against a backdrop of aging and declining birthrates, the demand for long-term care insurance (LTCI) systems in various countries throughout the world continues to rise. Most traditional LTCI systems only cover a limited group of people, which cannot solve the problem of nursing needs among other groups, and, further, it makes financial sustainability very difficult to achieve. This article aims to explore how Nantong successfully achieves both "full coverage" and "financial sustainability" through institutional innovation. Institutional innovation logic and financial sustainability of LTCI system in Nantong, one prefecture-level city with the highest degree of aging in China. Through field interviews and research, this article examines the LTCI system in Nantong, exploring its logic and its successful realization of institutional innovation, which combines international and local experience. The study further uses quantitative methods to measure the system's financial sustainability. From the seventh national population census bulletin, the 13th Five-Year population development plan, the Nantong Municipal Bureau of Statistics and Nantong Statistical Yearbook 2020 from Nantong government. And from the authors' field survey data in the Medical Insurance Bureau of Nantong. The findings reveal that the Nantong model effectively disperses institutional risks by means of horizontal and vertical transfer payments, diversified financing, and service outsourcing, achieving its dual goals of full coverage and financial sustainability in the long run. Nantong Model has interrupted the path dependence of traditional dual systems and the philosophy of fragmented institutional construction. Nantong's path-breaking institutional construction paradigm has important theoretical and practical value. The experience of Nantong may prove valuable and instructive, for not only other cities in China but also developing countries across the globe.

Mapping the Global Landscape of Long-Term Care Insurance Research: A Scientometric Analysis.

With the aging population increasing dramatically and the high cost of long-term care (LTC), long-term care insurance (LTCI) has expanded rapidly across the world. This review aims to summarize the status quo, evolution trends, and new frontiers of global LTCI research between 1984 and 2021 through a comprehensive retrospective analysis. A total of 1568 articles retrieved from the Web of Science Core Collection database were systematically analyzed using CiteSpace visualization software (CiteSpace 5.8. R2, developed by Dr. Chaomei Chen at Drexel University (Philadelphia, PA, USA)). The overall characteristics analysis showed that LTCI is an emerging research field in a rapid development stage—nearly 50% of articles were published in the past five years. The most productive LTCI research institutions and authors are located primarily in Japan and the USA. A rigorous analysis based on a dual perspective of references and keywords was applied to reveal that common LTCI hot topics include disability in the elderly, LTC financing, demand for and supply of LTCI, and LTCI systems. In addition, LTCI research trends have shifted from the supply side to the demand side, and from basic studies to practical applications. The new research frontiers are frailty in the elderly, demand for LTCI, and LTCI systems. These findings can provide help and reference for public health practitioners and researchers, as well as help with the sustainable development of LTCI research.

Analysis of Long-term Care Insurance Demand of Megalopolis in China under the Background of Aging of Population—Take Shanghai as an Example

The development of Long-term Care Insurance (LTCI), which matches that people get old before becoming rich lag behind. The mega-urban agglomeration formed in the metropolitan area under the process of urbanization intensifies the demand for insurance driven by long-term care needs. This paper constructs a theoretical model to sort out the micro-action mechanism of LTCI products entering the production field through the consumption of corporate security services, and at the same time entering the consumption field in the form of security services demand from families, individuals and government agencies, it reveals that the differences in the micro-paths of LTCI products entering the enterprise production field and the household consumption field under different regional economic and social conditions. Then, using the GM (1,1) model to analyze the demand for LTCI under the aging population trend of Shanghai, a super large city in China, we found that the situation and characteristics of Shanghai and Japan are similar, and the number of people who need care under the distribution of the elderly population in Shanghai from 2017 to 2027 is much lower than the number of people who need LTCI. Meanwhile, the current long-term nursing service has a large labor gap and high professional skills requirements, but the current salary is low. Besides, the share of elderly care institutions is small, which is not enough to support the current occupancy needs of severely disabled people. The actual development has a greater potential impact on public health expenditures, especially the increase in public health expenditures after the outbreak of the COVID-19 has brought uncertainty. Based on the above findings, we propose to introduce the successful mode of American political and commercial cooperation and the Japanese social security model to alleviate the rapid growth in the demand for LTCI accompanied by the aging trend in the mega-urban clusters formed in the urbanization process.

Housing liquidity and long-term care insurance demand: A quantitative evaluation

In theory, illiquid housing may substitute for long-term care insurance (LTCI) as retirees decumulate housing wealth mainly when moving to long-term care facilities. In this paper, I build and estimate a rich life-cycle model of single retirees in order to evaluate whether the impact of housing liquidity on LTCI demand is large. Overall, I find that the prospects of increasing LTCI demand by making housing more liquid are quite limited, as even large increases in housing liquidity generate modest increases in LTCI demand. I also find a limited impact of housing liquidity on the demand for life annuities. Finally, I show that the types of bequest motives used to rationalize the low take-up of reverse mortgages are generally inconsistent with the low demand for LTCI, suggesting that other factors may play a role in this low take-up of reverse mortgages.

Innovations in human resource management: willingness and ability of long-term care insurance

This paper summarizes the arguments within the scientific discussion on the investigation of human resource management of willingness and ability of long-term care insurance. The main purpose of the research is to investigate human resource management of willingness and ability of long-term care insurance considering the innovative international experience and the case of Henan province in China. Systematization literary sources and approaches for solving how the person could be motivated to use long-term care insurance indicate that this goal could be reached by issuing questionnaires. The relevance of the decision of this scientific problem is that the demand for long-term care insurance, domestic and foreign scholars mainly use questionnaire survey to conduct quantitative and qualitative research. Investigation of the proposed topic in the paper is carried out in the following logical sequence: the method of expert analysis allowed forming the survey of long-term care insurance. The research's theoretical and methodological basics are general scientific and special methods of certain economic phenomena and processes' cognition. The dialectical method was used to synthesize theoretical and methodological foundations of human resource management of willingness and ability of long-term care insurance foreign countries and China and formulate conclusions. Methodological tools of the research methods were respondents from January 20, 2020, until the end of March 31, 2020. The paper presents the results of the empirical analysis that the proportion of those willing to participate in the long-term care insurance system with an income of «less than 2,000 yuan» is 65.4%; the proportion of those willing to participate in the long-term care insurance system with an income of «2000-4000 yuan» is 69.0%, and the proportion of those willing to participate in the long-term care insurance system with an income of «4000-6000 yuan» is 74.1%. The regression analysis as the statistical method was used to determine whether and to what extent dependent and independent variables are significant. The research empirically confirms and theoretically proves that the factors of the insurance awareness model and the regression of Q24 «are you willing to participate in the long-term care insurance system» are not significant, indicating that the insurance awareness factor is not an influential factor for the old-age care insurance demand. Therefore, the original hypothesis was denied, and the insurance consciousness model factors became not significantly related to the willingness of demand for long-term care insurance. The research results could be useful for those who have a deal with responsible staff, but for this reason, some indicators could influence his behavior. Summing up the results of the held scientific research it could be done the following recommendations. First of all, strengthening publicity and standardize management of long-term care insurance system. Secondly, that should be accelerated the development of the nursing industry with aging, chronic diseases, and other increasingly serious, China's medical resources are very scarce, especially in the nursing industry. Thirdly, it would be progressive if China absorbed the foreign long-term care insurance experience. Fourthly, it should be improved the design of long-term care insurance and increased the types of insurance products.

Displaced, disliked and misunderstood: A systematic review of the reasons for low uptake of long-term care insurance and life annuities

With aging populations, the role of private insurance in financing late-in-life risks is likely to grow. Yet, demand for long-term care insurance (LTCI) and life annuities (hereafter annuities ) is very limited and lags behind economic projections. This systematic literature review surveys the large number of theoretical and empirical studies analyzing this contradiction. We examine the LTCI and annuity puzzles separately and show which factors limit demand for insurance against both late-in-life risks. Our systematic search rendered 3,945 unique hits and findings of 187 studies were integrated in our analyses. Results hereof suggest that holding of both insurance products is systematically impeded by substitution by social security, adverse selection, nonstandard preferences and limited rationality due to low financial literacy and risk unawareness. Furthermore, insurance holding is concentrated among wealthier and subjectively healthier individuals. A comprehensive approach addressing all four reasons for low uptake may increase insurance holding most effectively and may particularly empower people with lower socio-economic status to make well-informed decisions.

Long-term care risk misperceptions

This paper reports survey evidence on long-term care (LTC) risk misperceptions and demand for long-term care insurance (LTCI) in Canada. We study three LTC risks: needing help with at least one activity of daily living, needing access to a nursing home, and living to the age of 85. We contrast subjective (stated) probabilities with objective (predicted) probabilities for these three dimensions, and define misperceptions as the differences between them. We first provide descriptive statistics about objective and subjective probabilities. We then analyse how risk misperceptions correlate with individual characteristics and how they affect intentions and actual purchase of LTCI. We find that although misperceptions significantly affect both intention to buy LTCI and actual purchase of LTCI, they cannot explain the low take-up rate of LTCI in our sample. Correcting simultaneously the perceptions of LTC risks on the three dimensions would increase LTCI take-up by at most one percentage point.

Individual Uncertainty About Longevity.

This article presents an assessment of individual uncertainty about longevity. A survey performed on 3,331 French people enables us to record several survival probabilities per individual. On this basis, we compute subjective life expectancies (SLE) and subjective uncertainty regarding longevity (SUL), the standard deviation of each individual's subjective distribution of her or his own longevity. It is large and equal to more than 10 years for men and women. Its magnitude is comparable to the variability of longevity observed in life tables for individuals under 60, but it is smaller for those older than 60, which suggests use of private information by older respondents. Our econometric analysis confirms that individuals use private information-mainly their parents' survival and longevity-to adjust their level of uncertainty. Finally, we find that SUL has a sizable impact, in addition to SLE, on risky behaviors: more uncertainty on longevity significantly decreases the probability of unhealthy lifestyles. Given that individual uncertainty about longevity affects prevention behavior, retirement decisions, and demand for long-term care insurance, these results have important implications for public policy concerning health care and retirement.

What Affects the Demand for Long-Term Care Insurance? A Study of Middle-Aged and Older Adults in Hong Kong.

Despite the potential of private insurance in financing long-term care (LTC), its coverage remains rather limited. This study is built on a comprehensive framework to examine the demand for LTC insurance in Hong Kong, a rapidly aging Asian society. A telephone survey was conducted in 2016 to collect data that formed a sample of 1,474 middle-aged and older adults. Multivariate analysis reveals more nuanced characteristics of Hong Kong middle-aged and older adults who tend to show a demand for LTC insurance, including: (a) being younger, better educated, relatively high status, and financially literate; (b) living with children but reluctant to be a burden on the family; (c) being in a better financial situation and able to afford premiums; and (d) anticipation of LTC needs and dependence, and a preference for formal care. This study offers preliminary evidence to understand the demand structure of the LTC insurance market in an Asian society.

A Canadian Parlor Room-Type Approach to the Long-Term Care Insurance Puzzle

We examine the different hypotheses which have been put forward to explain the low demand for long-term care insurance using the results from a survey of 2000 Canadians that was conducted in the autumn of 2016. Defining the natural market of long-term care insurance buyers as the one catering to individuals aged between 50 and 70, we find that a remarkable proportion of this natural market has never been approached to purchase such protection. We estimate that approximately 60% of this natural market is currently under-served. After eliminating risk perception and demand side explanations for the low market penetration of long-term care insurance, we conclude that supply-side factors and the crowding-out by government programs are the most likely culprits in explaining the low proportion of Canadians that purchase LTC insurance from private providers.

Demand for Long-Term Care Insurance in China.

The aim of this study was to estimate willingness to pay (WTP) for long-term care insurance (LTCI) and to explore the determinants of demand for LTCI in China. We collected data from a household survey conducted in Qinghai and Zhejiang on a sample of 1842 households. We relied on contingent valuation methods to elicit the demand for LTCI and random effects logistic regression to analyze the factors associated with the demand for LTCI. Complementarily, we used document analysis to compare the LTCI designed in this study and the current LTCI policies in the pilot cities. More than 90% of the respondents expressed their willingness to buy LTCI. The median WTP for LTCI was estimated at 370.14 RMB/year, accounting for 2.29% of average annual per capita disposable income. Price, age, education status, and income were significantly associated with demand for LTCI. Most pilot cities were found to mainly rely on Urban Employees Basic Medical Insurance funds as the financing source for LTCI. Considering that financing is one of the greatest challenges in the development of China’s LTCI, we suggest that policy makers consider individual contribution as an important and possible option as a source of financing for LTCI.

Framing the decision to buy long-term care insurance: losses and gains in the context of statistical and narrative evidence

Rational models have difficulty explaining low levels of demand for long-term care insurance. We posit that insurers have framed the need for insurance in a manner that unintentionally promotes risk-seeking behavior (i.e., high probability loss frame), and that alternative frames can better promote willingness to insure. We further posit that emotional frames are more effective than rational risk frames in promoting willingness to pay. Survey evidence supports these hypotheses: emotional narrative frames are associated with greatest willingness to pay, and the high probability loss frame was associated with among the lowest average amounts willing to pay.

不同年龄群体对长期护理保险需求的影响因素分析—以北京市为例

目前我国长期护理保险有效需求不足是长期护理保险发展滞后的重要原因之一。本文以北京市为例，以不同年龄群体为出发点，基于实地问卷调查数据对长期护理保险有效需求的影响因素进行实证分析，并基于实证结果得出各年龄群体对长期护理保险需求的特点。研究表明：居民在40~60岁年龄段购买长期护理保险的意愿较强；经济因素和健康因素会影响各个年龄群体对长期护理保险需求；而婚姻状况、兄弟姐妹数量、子女数量、就业单位等因素只会对某年龄阶段人群的长期护理保险需求产生影响。为此，保险公司应按年龄对消费者市场进行细分，推出多样化的长期护理保险产品，如推出缴费方式多样化、保障范围多样化或给付方式多样化的长期护理保险产品。 At present, lacking of the effectual demand of long-term care insurance in China is one of the great causes of the slow development of long-term care insurance. Taking Beijing as an example, using different age groups as a starting point, combining survey samples, we analyze and explain influence factors on the long-term care insurance demand of different age groups, and conclude the characteristics of the different age groups’ demand. Research has shown that residents at 40 to 60 years old age are willing to buy long-term care insurance; economic and health factors affect the demand of different age groups; while the marital status, the number of siblings, the number of children, and the employment unit only influence on one certain age groups. Therefore, the insurance company shall subdivide the market based on the age of the consumer, and present more diversified long-term care insurance products, such as diversified payment methods, diversified insurance coverage or diversified benefit mode.

Interactions between Private Health and Long-term Care Insurance and the Effects of the Crisis: Evidence for Spain.

This paper analyzes the reasons for the scarce development of the private long-term care insurance market in Spain, and its relationship with health insurance. We are also interested in the effects the crisis has had both on the evolution of the demand for long-term care insurance and on the existence of regional disparities. We estimate bivariate probit models with endogenous variables using Spanish data from the Survey on Health and Retirement in Europe. Our results confirm that individuals wishing to purchase long-term care insurance are, in a sense, forced to subscribe a health insurance policy. In spite of this restriction in the supply of long-term care insurance contracts, we find its demand has grown in recent years, which we attribute to the budget cuts affecting the implementation of Spain's System of Autonomy and Attention to Dependent People. Regional differences in its implementation, as well as the varying effects the crisis has had across Spanish regions, lead to the existence of a crowding-in effect in the demand for long-term care insurance in those regions where co-payment is based on income and wealth, those that have a lower percentage of public long-term care beneficiaries, or those with a smaller share of cash benefits over total public benefits. Copyright © 2016 John Wiley & Sons, Ltd.

Demand-Side Factors Associated with the Purchase of Long-Term Care Insurance.

Demand-side barriers are known to be important toward explaining the limited purchase of private long-term care insurance (LTCI). In this study, we examine several factors associated with the demand for LTCI including the availability of less costly substitutes (e.g., Medicaid, family), consumer information, and risk perception. Using buyer surveys from 2000, 2005, and 2010, our results suggest that, among individuals not eliminated through medical underwriting, consumer risk perception and the presence of lower cost, imperfect substitutes are strongly associated with the limited purchase of LTCI. These factors were also predictive of the generosity of coverage purchased. If policymakers seek to stimulate demand for LTCI, new public policies might include Medicaid reform, integrating LTCI with Medicare Advantage plans, enhanced LTCI offerings through employers, and targeted informational campaigns.

Crowding out of long-term care insurance: evidence from European expectations data.

Long-term care (LTC) is the largest insurable risk that old-age individuals face in most western societies. However, the demand for LTC insurance is still ostensibly small in comparison with the financial risk. One explanation that has received limited support is that expectations of either 'public sector funding' and 'family support' crowd out individual incentives to seek insurance. This paper aims to investigate further the aforementioned motivational crowding-out hypothesis by developing a theoretical model and by drawing on an innovative empirical analysis of representative European survey data containing records on individual expectations of LTC funding sources (including private insurance, social insurance, and the family). The theoretical model predicts that, when informal care is treated as exogenously determined, expectations of both state support and informal care can potentially crowd out LTC insurance expectations, while this is not necessarily the case when informal care is endogenous to insurance, as happens when intra-family moral hazard is integrated in the insurance decision. We find evidence consistent with the presence of family crowding out but no robust evidence of public sector crowding out.