Long-Term Care Insurance

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Most of us would agree that when we are healthy and independent it is almost impossible to imagine a time in our lives when our health status could change and we would require specialized and ongoing care from someone else. And even making it more difficult to imagine is the fact that we do not have to be elderly and in need for care in a nursing home, but our circumstances could change while we are still young requiring long-term care for many years to come. Remember – people of all ages can be affected by an unexpected debilitating illness or an accident that would result in the need for around-the-clock care!


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It is not uncommon for Canadians to believe that full-time care in a long-term care facility will be paid for by their provincial health care programs – nothing could be further from the truth! Government plans could possibly pay for a very small portion of the costs of nursing homes or specialized care facilities, but most often the majority of costs for long-term care will be paid personally or by family.

According to the Canadian Life and Health Insurance Association (CLHIA), depending on your province of residence:

  • Accommodation in long-term care facilities typically costs from $900 to more than $5000 per month, based on the type of room and the level of government funding available.
  • Private home-care service can cost from $20 to $90 per hour for personal care or nursing care.
  • If you require extensive care, your costs could easily add up to between $35,000 and $65,000 a year.
  • About 60% of individuals over age 65 will require at least some type of long-term care services during their lifetime.
  • Today, about 40% of those receiving long-term care are between 18 and 65.
  • 52% of respondents that participated in a CLHIA survey revealed that they would not have sufficient funds to pay for long-term care if they needed it immediately.
  • Canadians when faced with high health-care bills and no money specifically put aside to cover them, have had to drain their retirement savings, run up their credit cards or mortgage their homes.

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What is Long-Term Care Insurance? 

Long-Term Care Insurance protects you with a “financial security blanket” by providing you with the necessary funding should you become unable to care for yourself and become dependent on another person for constant care because of a:

  • Chronic Illness
  • Disability
  • Cognitive Impairment such as dementia
  • Other age-related conditions preventing you from managing daily living activities without assistance for:
  • Dressing
  • Bathing
  • Eating
  • Toileting
  • Continence
  • Transferring in and out of a bed or chair
  • Walking

What Does Long-Term Care Insurance Cover?

 

 

Long-Term Care Insurance generally covers home care, assisted living, adult daycare, respite care, hospice care, nursing home and Alzheimer facilities. If home care is purchased, Long-Term Care Insurance can pay for home care often from the first day it is needed. It will pay for a visiting or live-in-care giver, companion, housekeeper, therapist or private nurse up to 7 days a week, 24 hours a day depending on the policy benefit maximum.

There are two types of Long-Term Care Insurance plans:

  1. The Reimbursement Plan reimburses your eligible expenses such as homemaking or private nursing services that you may incur on a given day. The eligible expenses and pre-determined maximums will be outlined in the plan that you purchase.
  2. The Income Style Plan offers a pre-determined monthly benefit amount. The regular benefit you receive could be monthly or weekly and can be spent any way you choose depending upon your circumstances. You could use your insurance payments to finance your care in a residential facility, for in-home care services or to pay someone in your own family to look after you.

When Will Long-Term Care Benefits be Paid?

 

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It is important to note that terms for approval of benefits can vary from policy to policy. Typically, and based on the contract that you purchase, benefits are payable when you can no longer perform a number of essential activities of daily living without substantial assistance. Most plans usually stipulate that at least two or more of the following conditions cannot be performed: bathing, dressing, toileting, transferring, continence, eating and walking.

A representative from the Insurance Company would assess your ability perform these activities to determine your eligibility for benefits. It may be that experts such as occupational Therapists or Nurses may visit you at home or call you to ask questions to evaluate your eligibility.

You may also qualify for benefits if it has been determined that you require substantial supervision due to a cognitive impairment due to conditions that cause dementia such as Alzheimer’s.


How is the Cost of Long-Term Care Insurance Determined?

Once you have considered your Long-Term Care Insurance options and are ready to purchase your very valuable protection, the Insurance Company that you have selected to provide your policy will take into account a number of factors on which the premium amount you pay will be based. These factors will include:

  • Your age at the time you apply. Obviously, the younger you are, the lower your premium.
  • Your state of health at the time you apply. The better your health, the lower the premium.
  • The type and amount of coverage you choose. The higher the benefit amount and the more options you choose, the higher the premium
  • The waiting period that you choose. The longer the waiting period the premium will be less expensive.

How Do I Go About Buying Long-Term Care Insurance?

 

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At Health Risk we believe that Long-Term Care Insurance could be one of the most valuable insurance policies you will ever own as it is built to protect YOU when you need it – a Living Benefit! These plans are not designed to replace your Life InsuranceDisability Insurance, or Critical Illness Insurance, but rather, are designed to complement and enhance your current insurance portfolio. Long-Term Care Insurance benefits can give you the flexibility and control of your finances to avoid financial devastation.

Many Canadian Insurers provide Long-Term Care Insurance but each insurer develops their own type of contractual provisions and options. Because there are so many choices it can be a long and difficult challenge to sort thru the various plans and their options in order to determine what plan suits you! At Health Risk, we have many years of experience in working with Long-Term Care Insurance and assisting our clients to choose the programs that they desire. We would be very happy to provide you with more information to help you decide whether Long-Term Care Insurance is right for you!

 

Call Us…We Are Here to Help!
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DISCLAIMER: Please be advised that the information on this web site is intended to present a broad variety of general information as simply and accurately for your knowledge as we possibly can. In no event does this information form part of or apply as a legal document. Therefore, please note that rules, conditions and industry practices discussed may be changed over time.