Faculty of Economics and Business Administration Publications Database

Don´t They Care? Or, Are They Just Unaware? Risk Perception and the Demand for Long-Term Care Insurance

Zhou-Richter, Tian
Browne, Mark J.
Volume: 77
Number: 4
Pages: 715 - 747
Month: December
ISSN-Print: 0022-4367
Link External Source: Online Version
Year: 2010
Abstract: The potential need for long-term care (LTC) is one of the greatest financial risks faced not only by the elderly but also by their adult children, who often provide care or financial assistance. We investigate adult children''s role in the demand for LTC insurance. Similar to flood insurance, we find that demand for LTC insurance is low due to low risk perception. The more aware adult children are of the risk, the more likely LTC insurance is to be purchased, either by the children themselves on behalf of their parents or by the parents under the influence of their children.