Household Demand for Private Long Term Care Insurance: An Exploratory Note

This study uses the most recent wave of the Health and Retirement Study (HRS) to examine participation of aging households in the long-term care insurance market. Results suggest that households who perceived a need to move to a nursing home within the next five years and households with higher preference for risk management through insurance were more likely to have long-term care coverage. Interestingly, the households with higher levels of risk tolerance were less likely to have long-term care coverage. Conversely, households with a bequest motive were more likely to have long-term care coverage. Additionally, the empirical results of this study indicate that the probability of having long-term care coverage was higher for women. Households with greater educational attainment and greater net worth were also more likely to have long-term care coverage.