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The Impact of Consumer Numeracy on the Purchase of Long-Term Care Insurance

Keywords: Long-term care insurance; consumer decision making; numeracy; long-term care financing.

Objective: To determine the effect of consumers’ numeric abilities on the likelihood of owning private long-term care insurance.

Data Source: The 2010 wave of the Health and Retirement Study, a nationally representative survey of Americans age 50 and older, was used (n = 12,796).

Study Design: Multivariate logistic regression was used to isolate the relationship between numeracy and long-term care insurance ownership.

Principal Findings: Each additional question answered correctly on a numeracy scale was associated with a 13 percent increase in the likelihood of holding LTCI, after controlling for predictors of policy demand, education, and cognitive function.


Conclusions: Poor numeracy may create barriers to long-term care insurance purchase. Policy efforts aimed at increasing consumer decision support or restructuring the marketplace for long-term care insurance may be needed to increase older adults' ability to prepare for future long-term care expenses.

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