Use Fiscal Policy To Promote The Development Of Long-term Care Insurance

Based on the definition of "Aging Society" in United States——"the populationabove the age of 65 accounts for 7% or more of the total population", China began toenter the aging society in 2000. As for 2004, the ratio of the elderly population inChina had reached 8.34%. The aging population has a reduction on their income afterretirement. In addition, many old people have endured huge economic burden due tothe following facts: the increasing kinds of disease has led to the remarkablyincreasing medical expenses;the coverage of the current social medical insurancesystem is limited to the urban units and their employees;and it only provides the mostbasic medical coverage. Presently, there are very few health insurance productsdesigned particularly for the elder. Several serious disease insurance products providethe age of applicant should be lower than 60 or 65. Therefore, LTCI is sure to haveenormous market potential in our country.Through the comparisons with different financial and taxation policies on LTCIin developed countries such as United States, Germany and Japan, this article reachedto the conclusion that financial and taxation policies place an extremely important rolein the development of commercial LTCI. Based on the present situation of our country,on the one hand, the development of LTCI may help to solve the pressing problem ofnursing for the elderly population. On the other hand, it may alleviate the financialpressure of our country. Consequently, through learning the experience of othercountries utilizing financial and taxation policies to promote the development of LTCI,this article advised on the development of LTCI in China: 1. to perfect tax law andrelated financial and taxation systems;2. to create new taxation items such as heritagetax and cultivate people's financing conception;3. to establish compulsory socialLTCI system in the future.