What We Know About Buyers and Non-Buyers of Private Long-Term Care Insurance: A Review of Studies. D. The Decision Making Process

08/01/2004

There are significant differences between buyers and non-buyers with respect to how they learned about LTC and the process by which they decided to buy or not to buy coverage. Retired buyers are more likely to have heard about LTC insurance from a trusted source. For example, in the Ritchey et al. (1991) study, the State Teacher's Retirement System (STRS) offered LTC insurance to retired teachers in Ohio, and the buyers were more likely than non-buyers to identify STRS as a source of information. Both working and retired buyers are also more likely to have had a financial advisor or planner; to have attended meetings at work and to cite them as a source of information; to read on their own (enrollment kit and booklet); to utilize websites; and to recall elements of the educational campaign (DHHS, 2003; HIAA, 2001; Stum et al., 2001; Lee, 1999; Ritchey et al., 1991; LTCG, 1999; AARP, 1986/1987). Buyers are also more likely than non-buyers to discuss the enrollment or purchase decision with others such as spouses/partners and co-workers/friends (Stum et al., 2001; Ritchey et al., 1991; LTCG, 1999), but they are less likely than non-buyers to cite television as a source of information (Ritchey et al., 1991). Finally, with respect to comparison shopping, buyers are more likely to comparison-shop than non-buyers.

Much of the empirical work in this area supports the descriptive findings. For example, Stum et al. (2001) find that discussing the decision to purchase insurance with others (e.g., spouses or partners and co-workers or friends), attending a seminar or a meeting at work, and using other information sources increase the probability of buying LTC insurance. McCall et al. (1998) found that talking with a specialist or financial planner increases the probability of purchasing insurance. The Lee (1999) study does not find this to be the case. This lack of consensus may likely reflect differences in the samples of populations studied.

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