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Lapses in Long-Term Care Insurance

Leora Friedberg, Wenliang Hou, Wei Sun and Anthony Webb ()

No 2017-08, SCEPA working paper series. from Schwartz Center for Economic Policy Analysis (SCEPA), The New School

Abstract: 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)
Date: 2017-06
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 (3) Track citations by RSS feed

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Persistent link: https://EconPapers.repec.org/RePEc:epa:cepawp:2017-13

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