Lapses in Long-Term Care Insurance
Wei Sun and
Anthony Webb ()
No 2017-08, SCEPA working paper series. from Schwartz Center for Economic Policy Analysis (SCEPA), The New School
About a quarter of people with long-term care insurance let their policies lapse before they die. This study shows that policyholders who enter nursing homes are more likely to let their insurance lapse due to cognitive impairment. For these individuals, long-term care insurance is worse than useless. They not only lose their premiums, but also spend down their wealth too rapidly, erroneously believing that their insurance policy will cover long-term care costs at older ages.
Keywords: long-term care insurance; insurance lapsing; insurance companies (search for similar items in EconPapers)
JEL-codes: D14 G22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-hea and nep-ias
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Persistent link: https://EconPapers.repec.org/RePEc:epa:cepawp:2017-13
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