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Long-Term Care
Insurance
Many of us at some point may become physically dependent as we grow
older. You may need to rely on someone else for various levels of
everyday activities. Preparing for physical
dependence should be a vital part of your financial plan.
What is Long Term Care Insurance?
Long Term Care Insurance is an insurance product sold in Canada
that helps provide for the cost of long-term care. Long-Term Care
insurance covers care that is not generally covered
by OHIP or other government grants.
Long term
care is defined as:
- 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
Care may be provided
in the home, in the community (e.g. Adult Day Centres), or in a facility
that provides long term care.
How Much Could Long Term Care Cost You?
You may be shocked to learn the high cost of long-term care. Depending on
the level of care and comfort you may require or desire government
support may not provide enough funds to cover the costs. Take a look at
how much long term care could cost you:
Nursing Home Care:
Nursing homes are
funded by the government; however there is a co-payment that is to be
paid by the individual.
Ontario Co-Payment
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Basic
or Standard Accommodation:
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Semi-Private
Room
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Private
Room
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**Extra costs for
additional services and comfort items
(Ministry of
Health and Long Term Care)
Retirement Home:
Retirement homes
are not subsidized by the government, therefore the individual is
responsible for the full payment.
Toronto Average
Slight variation
throughout the province, but relatively similar rates
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Semi-Private:
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Private:
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One-Bedroom
Suites:
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In-Home Care:
In-Home Care can
be partially covered by the government, however you must apply for
this coverage and you may not necessarily be eligible for
the full amount.
Toronto Average
Services depend on
amount of need and type of nurse providing care
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Household Services:
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Nursing services:
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Physiotherapy and Occupational Therapy:
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What are the plan options?
There are 2 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. The other type of long term care insurance is the income-style plan,
which is more flexible. It offers the income when you require care,
without providing proof of expenses.
There
are also options for such things as return of premium or continuance of
coverage if one of a couple passes away. For more information please
contact us today!
Long Term Care
Insurance:
A Case Study
From Manulife
Financial:
Married Couples
Interested in Long Term Care Insurance
The Plan
Les and Sheryl are considering a $300,000 Manulife LivingCare policy with
the Shared Coverage option and a 90 day waiting period. By choosing the
0.5% Benefit Option, Les and Sheryl’s $300,000 plan will pay $1,500 per
month if care is received at home, and double that if their care is in a
facility.
Why Share a Long
Term Care Plan?
The Shared Coverage plan is unique in Canada and it’s designed
specifically for couples. This plan design will provide Les and Sheryl
with much more flexibility than purchasing two single life plans. And
it’s a more efficient solution for couples’ long term care planning,
since it’s impossible to predict which spouse might one day require long
term care. The beauty of the Shared Coverage plan is that the benefits
are available to Les or Sheryl, or both at the same time. With two
separate plans, Les and Sheryl would be far less likely to utilize all
the long term care benefits they purchase.
Chances of
needing long term care
If they
purchase two separate single life plans:
Chances of Les
needing long term care: 48.5%
Chances of
Sheryl needing long term care: 64.2%
Chances of both
spouses needing long term care: 31.1%
If they purchase
one Shared Coverage Plan:
Chances of Les
or Sheryl (or both) needing long term care
81.5%
Key Advantages
of Shared Coverage
• The $300,000
pool of long term care benefits is shared by Les and Sheryl. Either of
them, or both, can be eligible for a $1,500 monthly Care Benefit
for home care, or double that for facility care.
• While either Les or Sheryl are receiving benefits, the full
premium of $455.01 per month is waived.
• The coverage can be split into two individual policies
of $150,000 each in the event of divorce.
• If Les passes away before Sheryl, the $300,000
LivingCare policy would simply continue for her as a single life plan,
with the remaining pool of long term care benefits. Her monthly premium
would be revised* to $300.10.
• If Sheryl
passes away before Les, the $300,000 LivingCare policy would simply
continue for him as a single life plan, with the remaining pool of long
term care benefits. His monthly premium would be revised* to $201.11.
*Revised premiums would be
based on original ages and premium rates, subject to any changes in
premium that have occurred for policies in force.
Long Term Care
is important to your health and comfort if you become physically
dependent. Make sure you have peace of mind when you will need it the
most. Read more about long term care: Manulife
Long Term Care or call us today!
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