
Long-term care insurance: Does experience matter?
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.
Duke Scholars
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- United States
- Risk Assessment
- Parents
- Nursing Homes
- Models, Statistical
- Middle Aged
- Male
- Insurance, Long-Term Care
- Humans
- Home Care Services
Citation

Published In
DOI
EISSN
Publication Date
Volume
Start / End Page
Location
Related Subject Headings
- United States
- Risk Assessment
- Parents
- Nursing Homes
- Models, Statistical
- Middle Aged
- Male
- Insurance, Long-Term Care
- Humans
- Home Care Services