Long Term Care Insurance; What is it?

Nowadays, most Canadians can expect to celebrate their 80th birthday. This is mostly due medical innovation and awareness to healthier lifestyles. However, as a result of living longer, studies indicate that almost half of people over the age of 65 will need some form of long term care.
Long term care can be costly. This care can range from part-time help of a medical professional (e.g. nurse) at home to full-time support at a nursing home facility
Full-Time care in a Long-Term Care facility is NOT covered by the provincial health care system. Depending on the individual circumstances, the government health care programs may cover a small portion of the cost associated with nursing home or other specialized residential care facility. This means, in most cases individuals and their families will have to cover all or most of the cost associated with long-term care.

What is Long Term Care Insurance?

Long Term Care (LTC) insurance provides financial protection in the event that the insured is unable to take care of themselves due to disability, chronic illness and/or cognitive impairment such as dementia or other age-related conditions.

It provides a TAX-FREE monthly benefit in the event that the insured is unable to perform at least TWO of SIX daily activities on their own. The six daily living activities are;
1. Bathing
2. Dressing
3. Toileting
4. Transferring
5. Eating
6. Continence

Advantages of Long Term Care insurance

Having Long-Term Care insurance as one part of your retirement can plan;

  • Maintain independence and reduce the burden on family
  • Provide the option to where care is received
  • Get quality nursing care
  • Protect retirement savings and other assets
  • Leave an inheritance for loved ones

What are different types of Long Term Care insurance coverage?

There are two main types of Long Term Care Insurance Plans;

1. Reimbursement Model

The reimbursement model is usually the lesser expensive of the two models. Once the individual meets all the eligibility requirements, the policy provides reimbursement for covered expenses up to a daily maximum.
Some restrictions may apply under the reimbursement model, for instance, types of services offered, eligible service providers and where the services are provided.

2. Income Model

The Income model is usually very straight forward with the least restrictions. Under Income Model Long Term Care, once the individual have met the eligibility for the claim and the waiting period, the benefit amount are paid regardless of the level of expenses. The plan provides an ongoing income and does not restrict the individual on how the money should be used.
Most companies allow unused benefit up to the maximum amount to be carried forward to the next term. The plan design (e.g. Monthly benefit, Payout Period) is determined at time of policy issue.

We don’t like to think about, but people age, get sick and unfortunately sometimes they can’t take care of themselves. Whether you decide to purchase insurance or not, it is important to have a plan in place to get the best care possible.
In the next TIP Center blog, we’ll take a look at;

  • Long Term Care Insurance Coverage Breakdown
  • Alternative Plans to Long-Term Care Insurance
  • Pros and Cons of Long-Term Care Insurance
For more information, or to address any inquiries you may have about the subject matter, please feel free to reach out to us at:
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In the next TIP Center, we’ll take a look at;

  • Long Term Care Insurance Coverage Breakdown
  • Alternative Plans to Long-Term Care Insurance
  • Pros and Cons of Long-Term Care Insurance

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