The long-term care insurance market

Abstract

This paper focuses on the existence of an insurance market for long-term care. There are three major risks for insurers that provide long-term care insurance: risk of escalating costs, risk of adverse selection and risk of moral hazard. Despite these risks, the long-term care insurance is a potentially expanding market for insurance companies able to innovate and design products tailored to this very specific demand. © 2008 The International Association for the Study of Insurance Economics.