Preferences for Insurance Services

Consumers in our study were asked to indicate their preferences for insurance services. Specifically, they were asked to indicate whether they presently have or would like to have the following types of insurance: long-term care, "medigap," car, and home-health care insurance.

In order to determine whether such preferences are unique to the older population or apply to the adult population in general, responses given by adults age 55 or older were compared to those given by younger adults. Actual use/ownership and desire for each service were combined into one "preference" category. A larger percentage of older adults than younger adults (77.7% vs. 47.0%) reported preferences for "medigap." However, a larger percentage of younger adults than older adults (95.9% vs. 89.8%) expressed preference for car insurance.

Baby Boomers vs. Seniors

While nearly all baby boomers (98.4%) have (or would like to have) car insurance, fewer (87.9%) seniors expressed similar preferences. Nearly as many baby boomers as seniors have or would like to have long-term care insurance (74.9% vs. 70.4%) and home-health care insurance (58.6% vs. 61.0%), while 43 percent of the younger group (compared with 87.9% of seniors) prefer "medigap" insurance.

Differences among Older Adults

One-third of those age 55 and over said they have long-term care insurance, with another 41 percent expressing preferences for this product. More than half (51.8%) have "medigap," and another 28.8 percent said they would like to have this type of insurance. About nine in ten adults age 55 and over have car insurance, with only 3 percent presently expressing interest in being covered. Finally, approximately one-third of the older adults in America said they have home-health care insurance, while another third would like to have it.

Preferences for certain types of insurance services are not uniform across older adults. Rather, there are significant variations in preferences by factors such as age, sex, and other demographic and lifestyle characteristics. There are also differences across gerontographic groups, with healthy hermits being least likely to prefer various insurance products, except car insurance. These differences further vary by type of insurance.

Long-Term Care. Preferences for long-term care insurance do not change much with age in late life. More older men than older women consider this coverage important (75.2% vs. 69.6%). Additionally, the higher an older person's income and level of educational attainment, the greater his or her preference for such long-term care insurance. In terms of geography, a larger percentage of southerners than northerners (75.1% vs. 69.5%) prefers long-term care insurance.

"Medigap." Preference for "medigap" jumps by more than 10 percent after age 65. Older adults who live in rural areas are more likely than those who live in urban areas to prefer this kind of insurance (82.6% vs. 76.8%). Also, health insurance that supplements medicare is more likely to be preferred by older adults who come from nonworking than from working households (81.7% vs. 75.9%). Finally, ailing outgoers are more likely than frail recluses to have or express desire for "medigap" (83.5% vs. 78.2%).

Car. As mature Americans age in late life, their preference for car insurance gradually declines. Mature males are are more likely than older females to favor car insurance coverage (94.0% vs. 86.5%). In addition, older people with higher income and education levels are more likely than their less educated and lower-income counterparts to prefer car insurance. Elderly who live with others are more likely than those who live alone to have or prefer such coverage (91.2% vs. 86.8%).

Home-Health Care Insurance. As older people age, their preferences for home-health care insurance generally remain unchanged. Older male adults are more likely than their female counterparts to favor this type of insurance (66.6% vs. 59.5%). In the meantime, more southerners than older adults who live in the West are likely to indicate preferences for home-health care coverage (66.5% vs. 58.7%). Also, mature Americans who live with others are more likely than their counterparts who live alone to have or prefer home-health care insurance (65.4% vs. 56.9%).

Source: The Maturing Marketplace: Buying Habits of Baby Boomers and Their Parents