Long-term care: People are living longer. Are you protected?
by Meiz Majdoub
In our continuing of different insurance products, we have for the month of June, Long Term Care Insurance. Long-term care insurance (LTC or LTCI) is an insurance product, that helps pay for the costs associated with Long Term Care. Long-term care insurance covers care generally not covered by health insurance.
Individuals who require long-term care are generally not sick in the traditional sense, but instead, are unable to perform two of the six activities of daily living (ADLs) such as dressing, bathing, eating, toileting, continence, transferring (getting in and out of a bed or chair), and walking.
Age is not a determining factor in needing long-term care. About 70 percent of individuals over age 65 will require at least some type of long-term care services during their lifetime. About 40% of those receiving long-term care today are between 18 and 64. Once a change of health occurs, long-term care insurance may not be available. Early onset (before age 65) Alzheimer’s and Parkinson’s disease are rare but do occur.
Long-term care is an issue because people are living longer. As people age, many times they need help with everyday activities of daily living or require supervision due to severe cognitive impairment. This impacts women even more since women often live longer than men and by default, they become caregivers to others.
- Long-term care insurance can cover home care, assisted living, adult daycare, respite care, hospice care, nursing home, Alzheimer’sfacilities, and home modification to accommodate disabilities. If home care coverage is purchased, long-term care insurance can pay for home care, often from the first day it is needed. It will pay for a visiting or live-in caregiver, companion, housekeeper, therapist or private duty nurse up to seven days a week, 24 hours a day up to the policy benefit maximum.
- Bring care into your home so that you do not need to downsize or move to a facility right away
- Lessen the burden on care-givers and support your family financially if you are going to live with them if you need care
- Manage your care and expenses if you have an unexpected severe accident, at any age, that results in your needing substantial assistance from a family member or care-giver
Other benefits of long-term care insurance:
- Many individuals may feel uncomfortable relying on their children or family members for support, and find that long-term care insurance could help cover out-of-pocket expenses. Without long-term care insurance, the cost of providing these services may quickly deplete the savings of the individual and/or their family.
- Traditional policy premiums, like automobile insurance premiums, are paid on a continual basis. If unused, no premiums are returned. However, if the policy has a “return of premium” rider, a death benefit will be paid to a beneficiary if the insured dies at a time when benefits received under the policy are less than the premiums paid to the insurer. The amount of the benefit is equal to the excess of premiums paid over benefits received.
People are living longer;
- The steady increase in life expectancy over the past centuries has been attributed to improved nutrition, better hygiene, access to safe drinking water, effective birth control and immunization and other medical interventions
- At every stage of the life cycle, males are more likely than females to die. This difference, evident since industrialization, has created a gender gap in life expectancy
- By 2031, average life expectancy in Canada is projected to have risen to 81.9 for males and 86.0 for females, with the gap between the sexes continuing to narrow
- People with lower incomes, those living in poorer neighbourhoods, and people residing in the Inuit-inhabited areas tend to have shorter life expectancies than do other Canadians.
- Although life expectancy is increasing, not all years will necessarily be spent in full health; on average, Canadians can expect to spend 70 of 80 years in good health
Questions to ask yourself:
- What do I want?
- Who will it affect?
- How long could my money/family/support last?
You should consider this coverage if:
- You’re concerned your retirement income might not last for your lifetime if your health deteriorates and government programs are insufficient to meet your needs
- You want the financial resources to help you choose the type and level of care that’s right for you if you have an accident or need substantial care later in life as you age
- You want to protect your wealth and legacy from being eroded by the cost of care
Many experts suggest shopping between the ages of 45 and 55 as part of an overall retirement plan to protect assets from the high costs and burdens of extended health care.
This insurance product is not widely used in the Country and very few companies that offer them. Especially if you are looking for a limited 20 year premium paid period, you have less than 2 weeks as the only company able to offer this is going to take it off the market.
The Majdoub Group is very experienced in this area and welcome questions, enquiries and comments. We are here for you. Below are our coordinates.
Meiz Majdoub, B.Comm, CLU, CH.F.C.
141 Holland Avenue
Ottawa ON K1Y 0Y2