Long term care insurance details
If you suddenly need long term care, financially you would have three choices:
- Trust that you will get the care you need through your provincial health system.
- Tap into your wealth and quickly deplete your assets on treatments and medicine. The cost of care starts at about $50,000 a year and can quickly increase to more than $70,000 as you need more drugs and supplies.
- Buy a Long Term Care Insurance policy.
You have permanent coverage, but premium payments are generally limited to 20 years.
For a fraction of the cost of future care, you can buy an insurance policy now and protect yourself. Age is also a major consideration.
The time to start thinking about purchasing long term care insurance is in your 50s, as a $1000 a year policy you take out in your fifties would cost $3400 to take out in your 70s.
A defining feature is that long term care insurance is not as dependent on current health as it is on lifestyle and mobility. For instance, someone that has survived cancer may not qualify for other forms of
insurance, but may qualify for this form of insurance.
There are two components to a long term care insurance policy:
- Home Care - care is provided to you in your home, assisting you with activities of daily living (ie. bathing, feeding, toileting, grooming, dressing).
- Facility Care - care is provided in a certified facility in your province, by trained and licensed staff.
Payments are described as money received on a daily basis, usually between $10 to $300. Payments begin after a selected waiting period (between 0 to 90 days), and continue for a specific duration (1 year, 2 years, 5 years or lifetime).
- Daily Benefits - the maximum amount payable per day when you qualify to claim on your long term care insurance policy. (Separate daily benefits may be selected for facility care and home care.)
- Benefit Period - the length of time you can collect once you go on claim (1, 2, 5 years or lifetime).
- Elimination Period - the length of time you must wait once care begins before you can start to collect on your insurance.
- Return of Premium - an optional benefit that will repay all your money to your beneficiaries if you die without ever collecting on your policy (some restrictions may apply). If you have received home care but not facility care, you may still be eligible for a return of premium of facility care.
- Waiver of Premium - while you are receiving either home or facility care, the insurance company will waive the premiums for your full policy. This feature is included at no extra cost.