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Long Term Care Insurance Guide

Long Care Term Insurance helps people pay for the care they need as they age, especially after retirement. Many policies for disability now offer the option to convert the disability benefits to long-term care benefits once a certain age has passed.

Long term care costs can be very high, and can strain savings or wipe out retirement savings.  Long term care insurance can be thought of “retirement savings insurance.”

Long-term care insurance can be a life-saver in the event that you are unable to perform basic daily tasks due to age, a chronic illness, or a handicap. Statistically, the odds are 50/50 that you will need some type of long-term care once you reach the age of 65. The cost of this care can be high, meaning you may find yourself dipping into your life savings to cover the expenses.

By purchasing long-term care insurance, you can rest assured that you will be able to afford the care you need without putting a strain on your savings or asking your children for financial help. The best time to start looking for a policy is between the ages of 60 and 65, as waiting any longer may cause you to be ineligible for coverage.

The cost of your policy will depend on a variety of factors, such as your age, health, gender, marital status, and the amount of coverage you choose. You should also be aware that there is a waiting period before your policy kicks in, and that the policy pays out a set amount of money on a daily basis for a pre-determined period of time.

With around 50% of Canadians over 65 requiring long-term care, it’s a good idea for everyone to consider this type of insurance. Without it, you may find yourself unable to access the care you need without draining your savings. Make sure to get expert advice before you make your final decision.

When buying long-term care insurance, there are a few mistakes to avoid. For example, don’t buy too early, as you may pay too much in premiums. Likewise, don’t wait too long to purchase a policy, as you may not be able to get approved due to your age or existing health conditions.

All in all, long-term care insurance can be a valuable tool for protecting your retirement savings and ensuring you have access to the care you need. Make sure to shop around and get expert advice before deciding on a policy.

Long term care policies usually pay when one cannot perform one or more daily activities. These can include:

  • Dressing
  • Feeding
  • Bathing
  • Walking
  • Getting in and out of bed/chair
  • Toileting

Age isn’t always the factor in determining who does and does not need long-term care. 40 percent of all people aged 18 to 64 need some type of assistance. That’s more than a quarter of people needing this kind of help who are not 65 or older.

Long term Care insurance can pay for one or both of the following situations

  1. You are in a long term care facility
  2. You are at home but receiving some form of assistance or nursing care.

Home care will pay (up to the maximum benefit of the policy) for a live-in caregiver or visiting caregiver, therapist, private duty nurse, companion, housekeeper, etc.  Facility care will pay for the facility, again up to the maximum benefit of your policy.

Long-Term Care Insurance: Think of it as “Retirement Savings Insurance”

Most people don’t like the idea of leaving the burden of financial care to their children or other family members.  Without this kind of insurance, a person’s savings, as well as their family members, can quickly disappear. Look at long-term care insurance to accomplish two things:

  1. To preserve the inheritance you want to leave behind for your family
  2. Protect your income and retirement savings from being exhausted.

How Insurance Companies Determine the Rates You Will Pay

There are several factors that determine how much you’ll pay for long-term care insurance which include:

  • Your age
  • The daily or monthly benefit
  • The elimination period
  • The length of time to pay
  • Inflation protection
  • Your Health rating (sub-standard, standard or preferred)

The majority of insurance companies provide multi-life and couples discounts on individual plans.

Long term care insurance is usually purchased by people aged 45 and over as they start to see the impact that long term care has had on other family members, and the impact in may have on their own retirement.  The sooner it is purchased, the cheaper it will be.  Some insurance carriers have left the long term care insurance market as they consider the possible future payouts to be too great.  So this is a valuable type of insurance to get before it may be too expensive, or too late.

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