Long-term care insurance: What to know

The good news: We’re living longer. The not so good news: As we age, many of us will confront cognitive illnesses such as Alzheimer’s and dementia, or other health problems such as diabetes, stroke, heart disease and cancer.

‘What happens if the day arrives when I can no longer take care of myself?’ is a concern many of us face. And we may have a similar concern for our parents or other loved ones.

This is where long-term care insurance comes in.

Back to long-term basics
Long-term care insurance helps to finance in-home care or a long-term care facility should you no longer be able to care for yourself. By granting access to more resources, it can help you and your family members to maintain your current lifestyle, independence and financial security. It can also help to cover costs if your spouse or child needs to assume your full-time care.

How does it work and why should I use it?
While there is a certain degree of public support available for long-term care, government programs are not all-inclusive. Long-term care insurance can help to fill the gaps in care that government plans do not provide.

To prepare for the future, experts recommend purchasing coverage between the ages of 50 and 55. Generally, the bare minimum coverage provides benefits to pay for health and personal care services for an insured person living in a long-term care facility. Additional coverage can also be purchased to pay for in-home care. This would include help with remedial, everyday tasks such as cooking, cleaning and shopping.

With some policies you have the option of selecting benefits that cover you for one year, two years, five years or for your entire life.

Not only can long-term care insurance help to alleviate the worry of having to deal with the financial responsibility of providing ongoing long-term care, it can also help to ease the care-giving burden that may fall upon your loved ones – while preserving your savings and investments.

How much does it cost?
One estimate from Sunlife Financial put the cost for a long-term care insurance plan that has a lifetime payment of premiums ($500 a week benefits, 250 weeks of benefit duration) at:

$38/month for a 40 year-old-male
$39/month for a 35-year-old-female
$75/month for a 55-year-old-male
$140/month for a 60-year-old-female

Accommodation in a long-term care facility depending on the type of room, care services, facilities etc. and the level of government funding available in your province of residence can cost $800 – $5,000 a month.

Homemaking and personal care will cost about $15 – $25 an hour.

Nursing home care can cost anywhere from $25-$65 an hour.

Note: Care costs vary depending on which financial institution you choose.

For more information, visit rbc.com or, sunlife.ca or insurance-canada.ca