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

M. Martin Boyer (), Philippe De Donder, Claude Fluet, Marie-Louise Leroux and Pierre-Carl Michaud

CIRANO Working Papers from CIRANO

Abstract: 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.

Keywords: Long-term Care Puzzle; Risk Perceptions; Supply and Demand of Insurance; Government Programs (search for similar items in EconPapers)
JEL-codes: C14 G02 G12 (search for similar items in EconPapers)
Date: 2018-04-25
New Economics Papers: this item is included in nep-age, nep-hea and nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://cirano.qc.ca/files/publications/2018s-13.pdf

Related works:
Working Paper: A Canadian Parlor Room-Type Approach to the Long-Term Care Insurance Puzzle (2018)
Working Paper: A Canadian Parlor Room-Type Approach to the Long-Term Care Insurance Puzzle (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:cir:cirwor:2018s-13

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