Preferences for annuity, critical illness, and long‐term care insurance portfolios: Evidence from an online survey

Abstract In many low‐ and middle‐income countries, social insurance provides basic pension benefits with limited cover for illness and care costs, while private insurance markets are underdeveloped. Using an online survey of retirement portfolio choices in urban China, we examined the stated demand for longevity, critical illness, and long‐term care (LTC) insurance under realistic financial constraints. The most preferred portfolios had 50% cover for expected out‐of‐pocket critical illness and LTC costs, and a monthly annuity of around 20% of average urban disposable income. Access to critical illness and LTC insurance increased annuity demand in some cases, with effects varying by wealth and level of cover. Product knowledge, higher financial competence, stronger bequest motives, and lower risk tolerance were linked to higher demand for critical illness and LTC cover but lower demand for annuities. Results inform the development of retirement insurance markets in countries with ageing populations and social and private insurance gaps.