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

Jeremy Pincus (), Katherine Hopewood () and Robert Mills ()
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Jeremy Pincus: Isobar
Katherine Hopewood: Isobar
Robert Mills: Isobar

Journal of Financial Services Marketing, 2017, vol. 22, issue 1, 33-40

Abstract: Abstract 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.

Keywords: Emotion; Motivation; Behavioral economics; Framing; Long term care insurance; Narrative (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:pal:jofsma:v:22:y:2017:i:1:d:10.1057_s41264-017-0019-4