So what is long-term care insurance? Long-term care is a living benefit. So what is a living benefit?
We are all familiar with life insurance that pays a benefit to your beneficiary when you die. Living benefits insurance, on the other hand, pays a benefit to you while you are still alive. A long-term care policy provides monthly care benefits if you become functionally dependent and satisfy a waiting period. The functional dependence means you require substantial assistance with two of six activities of daily living or substantial supervision because of cognitive impairmen. The six activities of daily living care are:
Bathing, Eating, Dressing, Toileting, Transferring, Maintaining continence.
A long-term care policy helps you pay for long term care and services, which means you may not have to rely on your family for financial help or hands on care, or both. It gives you and those you care about the opportunity to spend quality time together. A monthly care benefit is yours to use however you want, whether you are being cared for at home or in a long-term care facility. Typically your monthly benefit will depend on the actual costs of care, you don’t have to report how you’re spending the money. You simply receive your benefit and choose how you want to spend it, you can even use it to pay a family member or friend who’s helping care for you. Long-term care policies have many options at the time of purchase:
Shared coverage for couples — allows either you and/or your spouse or common-law partner to share coverage
Riders on the existing policy are also available — examples of those would be an inflation protection Rider to keep benefits in line with inflation and a refund of premium on death rider. Benefits can be doubled if you are in a care facility
Nobody wants to get old. But, as the saying goes, it’s better than the alternative. The good news is that you have choices about how you want to age.
Have you thought about what your future will be like if you’re not able to take care of yourself? Have you planned for long-term care such as nursing care or home care services? Putting a plan in place to deal with this possibility is a life choice that makes sense.
Our government programs for long-term care are not as comprehensive as programs for health care. Canadians are saying they don’t want to be a burden on their families and, overwhelmingly, they want to do the responsible thing. Long Term Care Insurance can go along way to protecting your assets.
Remember to always consult your advisor before taking any action.
Stuart Kirk is a Wealth Advisor with Precision Wealth Management Ltd and an Investment Funds Advisor with Manulife Securities Investment Services Inc. The opinions expressed are those of the author and may not necessarily reflect those of Precision Wealth Management Ltd or Manulife Securities Investment Services Inc. For comments or questions Stuart can be reached at stuart@precisionwealth.ca or 250-954-0247. Website www.precisionwealth.ca.
