Long Term Care Insurance: Protect yourself through securing your financial independence.
Your Retirement Plan can easily fall apart without aLong Term Care Plan.
Will your Provincial Health Care Insurance Plan look after you?
The population of Canada, and all of Canada, is rapidly aging. Over the next 15 years the number of seniors in Canada will double. Life expectancy in Canada is one of the highest in the world. This means more and more of us will live long into our retirement years. Are you planning to live 30 plus years into traditional retirement? You should be, because that is the new reality.
If you are a couple, the chances one of you will reach age 90 and beyond is almost 50%.
By 2015 there will be more seniors than children in Canada for the first time. This means the government will need to provide more health care, more home care and more long term care facilities than ever before. The need is going to continue to go up – and You will be competing with a great mass of seniors for limited long term care resources! Where is the Provincial Health Care Insurance Plan going to find the money to pay for all these very expensive services? Remember, there are less children being born, meaning less workers paying taxes. Consider this: in 2006 there were 5 people aged 15-64 for every one person 65 or older; by 2056 the ratio will be down to 2.2 people aged 15-64 for every one 65 or older. It is going to come down to limited budgets, cutting provincial services, and more and more responsibility given to the individual and their family to provide care in later years.
Adult children should be their parent’s care managers, not their caregivers.
It can be a very hard thing to ask adult children to put their lives on hold to care for aging parents. Without proper planning, it is no longer a question of asking but is a legal responsibility of families to provide care. If you have limited resources, finding a fully sponsored long term care bed will be very hard, with long waiting lists and placement anywhere in your province. If you have money to pay for additional services, then you will have more choice, but be prepared to spend $3,500 -$6,000 per month over and above what the provincial government subsidize for Assisted Living or Semi-Private Facilities.
Long Term Care Insurance makes good financial sense in Canada.
The likelihood that you will need some form of long term care as you age is almost 50% in Canada. That means one in two of us need serious care, either in our own home or in some kind of facility. The average time people spend in a care home is about 3 years once you are admitted. This doesn’t account for all the time you remain in your own home paying for private health care or living with adult children before things get so bad you NEED to be admitted. Remember, people don’t go willingly into a long term care facility – it is a last resort. The longer you can remain in your own home, in your own comfortable environment, the better. Recent studies suggest over 40% of all seniors inside care facilities are clinically depressed. Long Term Care Insurance can give you options.
Can you afford an additional $5,000 per month while in retirement to retain your dignity?
And if you could afford it, for how long could you keep it up? The average Canadian’s retirement nest egg would be depleted to $0 within 6 years by adding this level of cost. What if you could buy a long term care insurance policy today that would give you an additional $2,000 to $9,000 per month in benefit, and premiums would cost you about 5% of the benefit amount? Would that make some financial sense to you? Long Term Care Insurance truly is a solution to a major problem.
Let’s look at an example:
A 58 year old man in Canada decides to by Long Term Care Insurance. He decides to buy $1,000 per week of long term care insurance benefit for both home care or facility care if he would ever need the insurance. This benefit is unlimited, so it will never run out. At age 75 he gets Alzheimer’s and needs constant care. His body is strong, even though his mental capacity to care for himself has gone. He lives to age 84 before he dies. What did he spend, and what benefit did he get from his long term care insurance (keeping the math very simple). He would have paid premiums for 17 years at $205.74 per month: that would total $41,971 in premiums paid. He was claiming benefits of $1,000 per week for 9 years. This would total $468,000 in benefits paid. Unfortunately, this is not an unreal situation.
Designing a Long-Term Care Insurance plan for your needs.
Long-Term Care Insurance can be a very complex policy to design. At Life Guard Insurance we focus on maximizing the benefit amount you can claim while keeping your budget in mind. Many Long-Term Care Insurance policies have certain limitations, like benefits capped after reaching a certain dollar amount, or benefits only lasting a couple of years. Another thing to consider is does your plan pay money directly into your bank account, or do you have to submit medical claims to be reimbursed? Does your plan cover only facility care, or is home care also included? These are the sorts of options you can choose and they will adjust your premium considerably – the better it sounds, the more it costs.
When do you make a long term care insurance claim?
A claim is triggered by your doctor diagnosing you as needing help with 2 or more activities of daily living, or suffering from some form of mental dementia, like Alzheimer’s. There are 6 activities of daily living: feeding, dressing, bathing, transferring (i.e. moving from bed to chair), toileting, and continence. Needing help with these basic activities of life usually comes all at once, not one at a time, and often due to a major event like a fall down the stairs. Mental dementia is a slower progression, but once your doctor decides you are no longer fit to care for yourself, long term care insurance benefits start.
If you would like more information about Long-Term Care Insurance in Canada, please feel free to contact us at Life Guard Insurance.