Late-in-Life Risks and the Under-Insurance Puzzle

John Ameriks, Joseph Briggs (), Andrew Caplin, Matthew Shapiro and Christopher Tonetti
Additional contact information
John Ameriks: Vanguard Group, Inc
Andrew Caplin: NYU

Research Papers from Stanford University, Graduate School of Business

Abstract: Individuals face significant late-in-life risks, including needing long-term care (LTC). Yet, they hold little long-term care insurance (LTCI). Using both "strategic survey questions," which identify preferences, and stated demand questions, this paper investigates the degree to which a fundamental lack of interest and poor product features determine low LTCI holdings. It estimates a rich set of individual-level preferences and uses a life-cycle model to predict insurance demand, finding that better insurance would be far more widely held than are products in the market. Comparing stated and model-predicted demand shows that flaws in existing products provide a significant, but partial, explanation for this under-insurance puzzle.

JEL-codes: D14 D91 E21 G22 H31 I13 J14 (search for similar items in EconPapers)
Date: 2016-09
New Economics Papers: this item is included in nep-age, nep-ias and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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http://ebp-projects.isr.umich.edu/VRI/papers/VRI-LTC-I.pdf

Related works:
Working Paper: Late-in-Life Risks and the Under-Insurance Puzzle (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:stabus:3485

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