Research on Long-term Care Insurance: Status Quo and Directions for Future Research
Journal
The Geneva Papers on Risk and Insurance - Issues and Practice
ISSN
1018-5895
Type
journal article
Date Issued
2019
Author(s)
Abstract
We provide a structured literature review of long-term care (LTC) insurance using main path analysis, a mathematical tool to identify the most significant paths in a citation network. We identify three major research areas (financing, demand, and insurability) and systematically evaluate them based on standard frameworks. We further review established and innovative (insurance) solutions for LTC financing. Our results illustrate the immense difficulties of insuring LTC both on the demand side (e.g., low value of consumption while in care, existence of substitutes) and supply side (e.g., lack of predictability and asymmetric information), explaining the marginal contribution of insurance mechanisms to LTC financing. Combined products that bundle the risks, and public–private partnerships that integrate LTC into the pension systems might help to overcome the insurability limitations. In addition, alternative financing methods that go beyond the idea of risk pooling (LTC bond, LTC put option, equity release) could help to improve the sustainability of LTC financing.
Language
English
Refereed
Yes
Publisher
Palgrave Journals
Volume
44
Number
2
Start page
303
End page
356
Division(s)
Eprints ID
259921