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Title: Role of Private Long-Term Care Insurance in Financial Sustainability for an Aging Society
Author: Boj del Val, Eva
Claramunt Bielsa, M. Mercè
Varea, Javier
Keywords: Assegurances
Gestió financera
Envelliment de la població
Financial management
Population aging
Issue Date: 27-Oct-2020
Publisher: MDPI
Abstract: This work analyzes and quantifies the significance of private long-term care insurance for the elderly in protecting families from the increased expenses derived from dependency. We propose an economic and financial model for consumption and income deficit evolution. Survival/dependency are modeled by a Markov process with stochastic simulation techniques to obtain random variable distributions. Based on the Spanish survey of household finances data, Spanish families are classified using a cluster analysis for the wealth decumulation period. The conclusion is that, for a generic family, hiring long-term care insurance causes a significant reduction in the probability of lack of liquidity, the mean first time of lack of liquidity (if it occurs), and the mean present value of overall liquidity needs. It is also observed that there are important di erences between these impacts on different groups of families. These results show that hiring long-term care insurance would considerably lower financial problems in the decumulation period.
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It is part of: Sustainability, 2020, vol. 12, num. 21, p. 8894
Related resource:
ISSN: 2071-1050
Appears in Collections:Articles publicats en revistes (Matemàtica Econòmica, Financera i Actuarial)

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