INSURANCE MATTERS: What Is Long-Term Care Insurance?

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By Sherene Cole
June 4th, 2014 Edition

Long-term care insurance provides financial assistance should you become unable to care for yourself because of a chronic illness, disability, cognitive impairment or other age-related condition that prevents you from managing a number of daily living activities without assistance. It can cover stays in nursing homes and chronic care facilities or the services of a caregiver in your own home.

Aging Population
Did you know that your chances of living to 100 years are better than ever? While living a long and fruitful life is a great gift, a research conducted by the Canadian Life and Health Insurance Association (CLHIA) shows that Canadians are not adequately preparing themselves financially for their future long-term care needs.

This May Surprise You

Many Canadians mistakenly believe that full-time care in a long-term care facility will be fully paid by government health care programs. The truth is that government health care 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 cost associated with a long-term care situation.
Yet, most Canadians haven’t contemplated the need for long-term care in their retirement planning. According to a Leger Marketing survey conducted on behalf of the CLHIA, three quarters of Canadians admit they have no financial plan to pay for long-term care if they needed it..

Planning Ahead Is Not Only For the Aged

It is difficult to imagine when we are healthy and independent that at some point in our lives our health status could change and we could require specialized, ongoing care from someone else.

Often, when we think of the need for long-term care, we think of the elderly and the need for care in a nursing home. Let’s not forget there can be circumstances in a younger person’s life when long-term care could be required.

An unexpected debilitating illness or an accident could result in the need for around-the-clock care for people of all ages
Tips:
1. You may want to consider including long-term care insurance in your estate planning with the intention of helping you stay in your own home for as long as possible.
2. Ask about the length of time you must pay premiums and whether they are waived or discontinued when you make a claim and are receiving benefits.
3. Some plans provide extra benefits or options you can purchase such as:

o The option to ‘pool’ coverage which can be shared between you and your partner
o Waiver of your premium benefits (so you no longer have to make premium payments once you are collecting benefits)

If you have questions or comments or would like to see a subject matter covered in future, please refer to my contact details on page 5 of the editorial section.

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