Families' decisions to purchase long-term care insurance and relevant tax deductions

The need for elder care is on the rise as individuals are living longer. Senior housing is expected to experience a shortage by year 2030, requiring families to discuss long-term care accommodations and the financing of long-term care more often. Those discussions have integrated a fairly new insurance product called long-term care insurance, which was formally called nursing home insurance but can now be purchased to cover all long-term care accommodations. Guided by decision making in families theory, the current study investigates the role of the decision-making processes on purchasing long-term care insurance while considering the long-term care insurance tax deduction during the decision-making process. This investigation tests a model of family decision making by examining the decision context, perceptions, and decision processes that contribute to long-term care insurance purchase decisions. Few studies have examined family decisions relating to later in life family issues such as long-term care. An even fewer number of studies have examined the impact of government incentives such as the long-term care insurance tax deduction on families purchase decisions. This study found that long-term care expenditures are just as important as retirement financial needs. As a result financial advisors, accountants, and financial strategists can implement best practices and tax strategies that will improve family's long-term care preparedness.