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Complementing Tax-financed Long-term Care with Private Insurance

Author

Listed:
  • Määttänen, Niku
  • Valkonen, Tarmo

Abstract

Many elderly people in Finland could increase they standard of living and receive more freedom of choice regarding long-term care by releasing part of their housing equity. The possibility to purchase reasonably priced life annuities and long-term care insurance would increase the benefits of housing equity release. However, there is virtually no market for such insurance in Finland. This report illustrates the benefits of life annuities and long-term care insurance, provides example of actuarially fair insurance pricing, and describes the conditions for this market to emerge. It argues that the government should support the emergence of an insurance market by clarifying the public welfare promise related to old age care and by promising not to seize private pension and long-term care insurance payouts e.g. via higher user fees for publicly provided long-term care.

Suggested Citation

  • Määttänen, Niku & Valkonen, Tarmo, 2020. "Complementing Tax-financed Long-term Care with Private Insurance," ETLA Reports 98, The Research Institute of the Finnish Economy.
    • Handle: RePEc:rif:report:98
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    File URL: https://www.etla.fi/wp-content/uploads/ETLA-Raportit-Reports-98.pdf
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    More about this item

    Keywords

    Long-term care insurance; Life annuities; Ageing;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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