Good News! Since 1950, life expectancy has increased an average of 10.5 years for both men and women in Canada.
But what do we do with that additional time? The risk of dependency increases with age, and half of those people aged 65 or older will some day require some form of long term care.
As we get older it can become hard to complete some routine tasks and we might need assistance with food preparation, bathing, house cleaning, grocery shopping or seeing doctors or other medical professionals.
The Effect of Aging on Families
The number of Canadians aged 65 and older is set to rise from 17% to 22% of the general population over this next decade. Very often the woman in the family is given the responsibility of taking care of an elderly family member. This creates a whole new set of problems for her and her family: what if there is a need for her to leave her job or reduce her hours? Who can possibly take care of someone who might need 24-hour supervision and care?
Planning in advance—both with long-term care insurance and by creating an understanding among all family members about how to balance who will take on which responsibilities—can help ensure that everyone is prepared and that quality of life is maintained as best as possible.
In the event of a loss of independence one has several options:
- Move to a private care facility
- Move to a government subsidized facility
- Remain at home and obtain at-home care from caregivers
As wonderful as these services can be, they come at a price. Most Canadians have no financial plan to pay for long-term care if they should need it. Long-term care is unfortunately not covered by the public health care system, and government health care programs may cover only a portion of nursing home or other residential care facility costs.
Where will this money come from?
5 years of care could reduce your savings by as much as $300,000. Costs at long-term care facilities can range wildly, from $1,000 to over $5,000 a month, depending on the type of location, care facility and the room. Homemaking, personal care, and nursing care costs can range from $12 to $30 per hour.
Long-term care insurance provides financial protection in case you or a loved one become unable to care for yourself. The insurance will commence for a number of medical reasons, including, but not limited to, disability and chronic illness. Long-term care insurance is flexible in the sense that it can cover care for nursing homes, caregivers in your own home, or chronic care facilities.
Long-term care coverage can provide the money you need in order to maintain quality of life and financial security. It will also afford those caring for the disabled person the time and freedom to focus on spending time with that person. The disabled person can avoid placing the financial hardship of a loss of independence on family and friends, and maintain a relative stable standard of living.
How do long-term care plans work?
There are two types of plans. One plan will reimburse for expenses outlined in the particular plan, up to a predetermined maximum. The other offers a pre-determined monthly benefit amount, so the money can be spent as the insured sees best fit. For example, an individual can be insured for $3,000 a month which would be used to pay for in-home care or towards a care facility. Of course, a plan’s premium, as well as duration and value of payments will all vary based on one’s situation as well as what is needed.
Long-term care plans come into effect when an insured person can’t perform at least two of six “activities of daily living,” which include bathing, caring for incontinence, dressing, eating, toileting, and getting in or out of beds and chairs.
Finally, one of the most important benefits of long-term care insurance is that, if you come to need care, you can depend on the insurance to cover those expenses. This way, your savings and assets are safe from having to be spent on care.
For more information on long-term care insurance, call us at 514-934-0586.
