What is Long Term Care Insurance? Long Term Care Insurance, or LTC, helps to offset the expenses that are incurred as a result of long-term care either at home or in a long-term care facility. A LTC plan will pay you tax free benefits as long as you cannot perform any two of the basic necessary activities of daily living – eating, bathing, dressing, using the toilet, or transferring positions (in and out of a bed or chair). Long Term Care Insurance is also long-term peace of mind insurance. It will:

  • Help to preserve your retirement income and assets
  • Prevent you from becoming a burden on your family
  • Give you control and the personal freedom to choose the type of care that you want

What type of coverage does a Long Term Care Policy offer? There are two types of Long Term Care Insurance Policies. One plan reimburses you for eligible expenses you receive on a given day, up to a pre-set maximum. The other type of plan is referred to as income-style. It is extremely flexible and provides you with an income benefit to cover any type of service that you require from any source including family members.

How can I use my Long Term Care Benefits? The type of LTC plan that you have will determine the benefits that you have available to you and what they can be used for. There are three types of long-term care:

  • Personal or Custodial Care provide assistance such as dressing, bathing, cleaning, preparing meals, eating, toileting, transferring, incontinence, cleaning, laundry, and paying bills
  • Supervisory Care provides the necessary supervision to people who are cognitively impaired and need monitoring and verbal reminders to accomplish everyday tasks
  • Skilled or Professional Care is provided in-home or in a facility by a medical professional such as a doctor, nurse or therapist and may include nursing care, rehabilitation, and therapy

Do I need Long Term Care Insurance? Long Term Care Insurance should be a part of everyone’s plan for the future. Will your retirement income be sufficient to provide you with adequate long-term care when you can no longer take care of yourself? Canadians are living longer. Statistics Canada reports that one in every seven Canadians is 65 and over and projects that by 2021, Canada’s seven million Canadian seniors will represent 19% of our total population. According to a recent study done by Munich Re:

  • There is a 48.4% chance of a Canadian male aged 60 needing long-term care
  • There is a 64.2% chance of a Canadian female aged 60 needing long-term care
  • There is an 81.5% chance of at least one spouse of a husband and wife couple both aged 60 needing long-term care

According to the Alzheimer’s Society of Canada:

  • 500,000 Canadians have Alzheimer’s disease or a related dementia
  • 71,000 of Canadian with Alzheimer’s disease are under age 65
  • 1 in 11 Canadian seniors has Alzheimer’s disease or a related dementia
  • 50% more Canadians and their families could be facing Alzheimer’s disease or a related dementia in just 5 years

How much Long Term Insurance will I need? There are many factors to consider including your current income requirements, long-term care costs in your area, and other annual expenses.