Many people think that our provincial health plans have generous long-term care benefits. What is not known is that a person must have income and assets below a certain level in order to qualify for accommodation in a long term care facility. Further, many of these government subsidized facilities have waiting lists several years long.
Long Term Care Insurance is a relatively new form of insurance that is gaining in popularity as our population ages and the government continues to reduce medical services. Long Term Care Insurance provides tax-free benefits when a person is unable to perform one or more of the normal activities of daily living. It provides a daily benefit (e.g. $100 per day) to cover the cost of either having a registered nurse come to the policyholder’s home, or for the policyholder’s stay in a nursing home.
Recent surveys indicate long term care costs average about $115 per day, or $42,000 per year. The average length of time that care is required is 2.2 years. With certain conditions, this period could be much longer. Consider that the number of Canadians age 80 and over will double in the next20 years and triple in the next 40 years. With demand growing, these costs are expecting to increase dramatically. Have you included these in your financial plan?
It is recommended that Long Term Care Insurance be purchased while one is in his/her 50s or 60sas it is quite affordable and one’s health is probably still good. The premiums are based on age, health and the type of plan purchased.
Benefits of Long Term Care Insurance:
- Protection in the event of a catastrophe
- Logical addition to overall plan of risk protection
- Allows the insured to maintain independence and dignity
- Helps maintain control of the insured’s life and estate
- Reduces the insured’s reliance on family members
- Helps the insured afford the level and type of care wanted or needed
- Premiums are easier to budget than long term care expenses