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

Cahiers de recherche from Chaire de recherche Industrielle Alliance sur les enjeux économiques des changements démographiques

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
New Economics Papers: this item is included in nep-age, nep-hea and nep-ias
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Citations: View citations in EconPapers (4)

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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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