Family Structure and Long‐Term Care Insurance Purchase

Abstract

While it has long been assumed that family structure and potential sources of informal care play a large role in the purchase decisions for long-term care insurance (LTCI), current empirical evidence is inconclusive. Our study examines the relationship between family structure and LTCI purchase and addresses several major limitations of the prior literature by using a long panel of data and considering modern family relationships, such as presence of stepchildren. We find that family structure characteristics from one’s own generation, particularly about one’s spouse, are associated with purchase, but that few family structure attributes from the younger generation have an influence. Family factors that may indicate future caregiver supply are negatively associated with purchase: having a coresidential child, signaling close proximity, and having a currently working spouse, signaling a healthy and able spouse, that LTC planning has not occurred yet, or that there is less need for asset protection afforded by LTCI. Dynamic factors, such as increasing wealth or turning 65, are associated with higher likelihood of LTCI purchase.

Drivers of Long-Term Care Considerations by Persons With Cognitive Impairment

“…Financial considerations (e.g., having consulted with a financial planner around LTC), LTC alternatives (e.g., marital status), and patient demographics (e.g., patient gender) were generally identified as important. These findings are consistent with the LTC planning literature which shows that availability of informal care decreases the likelihood of making financial investments in formal LTC by purchasing LTC insurance (Van Houtven et al, 2015). In our study, proximity of children was associated with consideration of family care and being married was inversely associated with consideration of formal home care.…”

Who Wants Long-Term Care Insurance? A Stated Preference Survey of Attitudes, Beliefs, and Characteristics

“…Even after controlling for a variety of family structure types, Van Houtven et al were unable to find an effect of availability of younger generations to provide LTC on LTCI ownership. 21 Our study adds to the growing literature which finds evidence for the hypothesis lacking.…”

The effect of long-term care public benefits and insurance on informal care from outside the household: empirical evidence from Italy and Spain

“…As the family structure is very likely to simultaneously affect the supply of informal care and the decision to purchase voluntary LTC insurance [38,40], we consider a large set of controls describing the respondent's household and family composition. We include the number of members living in the respondent's household and his/her number of children, as well as a set of binary variables such as being married, widow, having a co-resident child, and having a daughter.…”