The demographic characteristics that are common to both the descriptive and the empirical analyses include: age, gender, marital status, health status, level of education, income, liquid assets, and the presence of children and their distance from the respondent. Table 1 summarizes the results of the descriptive studies showing whether a particular demographic characteristic distinguishes between buyers and non-buyers among retirees (individual market) and employees (group market). (Note that the Appendix summarizes results on all variables for each individual study.)
|TABLE 1: Demographic Characteristics that Distinguish between Buyers and Non-Buyers|
|Average age: buyers are younger||No||Yes|
|Gender: buyers are more likely to be female||Contradictory evidence||Not significant|
|Marital status: buyers less likely to be married||Not significant||Not significant|
|Education: buyers more likely to have a college degree||Yes||Yes|
|Income: buyers have higher income||Yes||Yes|
|Assets: buyers more likely to have more assets||Yes||Yes|
|Health: buyers more likely to cite health as excellent||No||Yes|
|Children: buyers less likely to have children nearby||N.A.||Yes|
Among retirees, advancing age is associated with non-purchase. In contrast, among the employee-group market, advancing age is associated with purchase. There are two factors that explain what might seem to be contradictory trends. First, as employees age, they are more likely to think about and plan for retirement. Having a LTC insurance policy is often considered to be part of a prudent retirement plan. Also, many of these individuals may have lower family expenses as children graduate from college and mortgages are reduced. Therefore, "older" employees may be more aware of LTC challenges and may also have greater financial wherewithal to do something about it. With respect to retirees, older age is associated with rapidly increasing premiums. Given the fact that many retirees are on fixed incomes, the ability to pay for the product becomes more limited at older ages. For this reason, younger retirees are more likely to purchase policies than older retirees.
With respect to gender, there is contradictory evidence across the studies regarding whether it distinguishes between employees and there is agreement that it is not an important differentiator in the retiree market. In general, levels of education, income and assets are highly correlated. In the employer market, a higher level of these variables is associated with being a buyer. Given the expense of the product it is not surprising that as wealth increases, so too does the probability of being a buyer. This holds across both market segments. In contrast, higher education status is not a significant differentiator in the retiree market.
In the retiree market, those who report their health to be excellent are more likely to buy a policy than those who do not. This is likely related to their younger age and it may also reflect economic status. In the employee-group market, this factor is not important. In part, this is because there is very little variation in self-reported health status. Finally, retired buyers are also less likely than retired non-buyers to have children living nearby. Given that a primary purpose for having the insurance is to enable individuals who become disabled to remain in their homes, it is not surprising that those who do not have family supports, are more likely to find the insurance attractive.
Empirical study results related to demographic characteristics are displayed in Table 3. Being female, being single, having higher income and assets and having children who live far away increase the probability of buying insurance. Being younger, having a college degree and perceiving your own health status to be excellent result in an increasing probability of buying insurance in some of the studies -- primarily those focused on the retiree market -- and in a decreasing probability to buy insurance in other studies -- those focused on the employer-group market.