We study the role and design of private and public insurance programs when informal care is uncertain. Children …'s degree of altruism is randomly distributed over some interval. Social insurance helps parents who receive a low level of care …

while children's altruism is not. The traditional topping up and opting out policies are special cases of ours. Both total … and informal care should increase with the children's level of altruism. This obtains under full and asymmetric … explained by the need to provide incentives to high-altruism children. The implementing contract is always such that social care …

the probability of altruism. With an opting out scheme, there will be three possible equilibria depending on the children …’s degree of altruism being “low,” “moderate,” or “very high”. These imply: full LTC insurance with no aid from children, less … problems, on family aid. Under a topping up scheme, when the probability of altruism is high, there is no need for insurance …