Long Term Care Insurance – It’s More Important Than You Think.

Long Term Care Insurance - Steinman Financial NetworkWith Long-Term Care Insurance, two generations are protected: parents and children. It helps parents maintain their lifestyle and financial security by giving them the resources they need to remain independent, even in the face of a serious health setback that may require one spouse to care for the other. At the same time, it gives children an alternative to providing their parents with the care themselves.

Long-term care insurance covers virtually all of the expenses of long-term care, either in your own home or in a facility, for periods ranging from a few years to lifetime coverage. If you are between the ages of 30 and 80, you can apply for coverage. Depending on the level of benefit you select, you can receive up to $300 per day – tax free.

More common than you think – Alarming Statistics:

  • About 50,000 strokes occur in Canada each year. Stroke is the leading cause of transfer from hospital to long term care.
  • 1 in 11 Canadians over age 65 is affected by Alzheimer’s disease or a related dementia.
  • 7% of Canadians age 65 and over reside in health care institutions.
  • An additional 28% of Canadians age 65 and over receive care due to a long term health problem, although they who do not live in a health care institution.

Canadian Institute for Health Information, 2003.
Alzheimer Society website, 2009.
Statistics Canada, 2002

Long-Term Care Insurance pays a daily benefit if the insured

  • Loses the ability to care for him/herself (loses the ability to do 2 of 6 activities of daily living, due to cognitive impairment or a condition that results in the inability to perform two or more activities of daily living and
  • Requires the services of a long-term care facility or professional assistance at home. Although only a handful of companies in Canada currently offer this coverage, we can expect that many more will make it available in the next few years. When looking for a long-term care insurance program, we suggest that the following are important features to watch for:


Activities of daily living

Bathing       Eating      Dressing       Toileting      Transferring          Maintaining continence


Long term care may include:

  • nursing care
  • rehabilitation and therapy
  • personal care (help with activities of daily living like dressing, eating and bathing)
  • homemaking services (meal preparation, cleaning, laundry)
  • supervision by another person


Three types of protection

There are 3 types of long term care insurance policies:

  1. One reimburses you for eligible expenses you receive on a given day, up to a pre-set maximum.
  2. Another pays a set daily amount if you have an eligible expense that day.
  3. The final type is the income-style plan, which is the most flexible. It offers the income when you require the care, without having to prove you had expenses.


What to look for:

  • Unisex rates (this keeps the premiums lower for women)
  • No extra charge for smokers
  • Waiver of premium (when you start receiving the benefits, you stop paying the premiums)
  • Limited premium payment period
  • No medical examination (although the companies will check your medical history)

Long Term Cost Calulator (http://longtermcareinsurance.org/carecalculator.html)

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