Long-term care insurance: Does experience matter?


Journal Article

We examine whether long-term care (LTC) experience helps explain the low demand for long-term care insurance (LTCI). We test if expectations about future informal care receipt, expectations about inheritance receipt, and LTCI purchase decisions vary between individuals whose parents or in-laws have used LTC versus those who have not. We find parental use of a nursing home decreases expectations that one's children will provide informal care, consistent with the demonstration effect. Nursing home use by in-laws does not have the same impact, suggesting that individuals are responding to information gained about their own aging trajectory. Nursing home use by either a parent or in-law increases LTCI purchase probability by 0.8 percentage points, with no significant difference in response between parents' and in-laws' use. The estimated increase in purchase probability from experience with LTC is about half the previously estimated increase from tax policy-induced price decreases.

Full Text

Duke Authors

Cited Authors

  • Coe, NB; Skira, MM; Van Houtven, CH

Published Date

  • March 2015

Published In

Volume / Issue

  • 40 /

Start / End Page

  • 122 - 131

PubMed ID

  • 25647006

Pubmed Central ID

  • 25647006

Electronic International Standard Serial Number (EISSN)

  • 1879-1646

Digital Object Identifier (DOI)

  • 10.1016/j.jhealeco.2015.01.001


  • eng

Conference Location

  • Netherlands