Why consider Long Term Care insurance?
Canadian population is aging. By the year 2036, it’s expected that 25 per cent of the population will be over 65
with almost 1 million Canadians afflicted with dementia. Many Canadians mistakenly believe that full-time care in a long-term care facilitywill be fully paid by government health care programs. However, long-term care is not covered by the public healthcare system.
The truth is that government healthcare programs may cover only a small part of the costs for a nursing home or other specialized residential care facility, or perhaps none at all depending on the circumstances. This means that individuals (or their families) will have to pay for a significant portion of the costs associated with a long-term care situation out of their own pockets. Generally speaking expenses like these arise in older age, however accident or debilitating illness can cause young person needing around-the-clock care.
The Canadian Life and Health Insurance Association (CLHIA) reported that depending on your province of residence:
- Accommodation in long-term care facilities typically costs from $900 to more than $5,000 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 want to learn how to protect your family budget from the high cost of long term care we got some tips for you.
What should I know before purchasing a Long Term Care policy?
There are two types of long-term care insurance plans:
• One reimburses you for eligible expenses that are outlined in your plan (such as homemaking or private nursing services) that you may incur on a given day, up to a pre-determined maximum.
• The other is an income style plan, which offers a pre-determined monthly benefit amount.
With an income-style plan, the regular benefit you receive (e.g., monthly, weekly) can be spent any way you choose. You can use it to help finance your care in a residential facility, for in-home care services or to pay someone in your own family to look after you. Most plans include a waiting period. This means once you qualify for benefits, you must wait a specified period of time before your benefits will be payable. Common waiting periods are between 30-90 days.
Your insurance premiums will depend on your age and health when you apply, so coverage is typically less expensive for younger applicants. The annual cost will also reflect the type and amount of coverage you choose, the length of time benefits will be paid and the waiting period you select.
You can make a claim to receive your benefits when your coverage becomes effective. In many cases that’s immediately upon successful purchase. Once coverage is effective, your dependency will have to persist for the number of days in your selected waiting period before you start receiving your benefits. Some plans will pay your benefits for up to one year, while other plans may pay for two years, five years or even an unlimited period.
To learn more about a Long Term Care insurance products and find the one that is right for you please contact our office.