Long-Term Care Insurance
January 2005
Long-Term Care Insurance can help to pay for the costs of long-term care in your later years. This can minimize the risk that your assets will not be sufficient to support you, or that the estate accumulated for your children, church or charity will be diminished by the outlay for long-term care.
What are the Financial Risks of Long-Term Health Care?
Many of us may need long-term medical care in the future, whether it is in our home or a longterm care facility. This type of care brings with it financial risks: the risk that we cannot afford a desired level of medical care and/or the risk that these costs may deplete (or significantly reduce) our retirement savings during our lifetime.
The more common expenses that one might face as a result of physical or mental dependency are summarized as follows:
- Prescription drugs – those not covered by BC’s PharmaCare Program
- Homemaking Services – assistance with cooking, cleaning, maintenance and shopping
- Home Health Services – part-time medical assistance by a professional in your home
- Occupational Therapy – rehabilitation services
- Home or automobile modifications – to accommodate your changing needs
- 24 Hour Medical Care – whether it be in your home, or a government-sponsored or private long-term care facility
These costs typically range from a few hundred dollars to over $10,000 per month.
For example, a fully subsidized government longterm care facility in BC typically costs $1,500 per month. One solution to help offset some of these costs is to obtain a Long-Term Care insurance policy while you are still in good health.
What is Long-Term Care (LTC) Insurance?
LTC insurance will pay you a daily cash benefit should you become “functionally dependent”. This means you are no longer able to perform two or more of the “activities of daily living” (feeding, bathing, dressing, transferring, toileting or continence) or you are cognitively impaired (e.g. Alzheimer’s). The dependence can be a result of an injury or sickness, and the benefit can typically be used for any expense that you see fit.
How Much Does LTC Insurance Cost?
The cost of LTC insurance varies. Several insurance companies offer plans with a number of differing benefits and options. The amount of insurance you apply for, your age, and the type of policy you choose all have an impact on the cost of the insurance.
Some policies will refund all premiums paid, less any benefits received, upon the death of the insured.
Long Term Care Insurance can be an important part of your retirement income and estate plan.
Your Rogers Group Financial advisor can provide further information and prepare a customized Long–Term Care Insurance quotation tailored to your specific needs.