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.
Functional dependence means that you require substantial assistance with two of six activities of daily living or substantial supervision because of cognitive impairment, such as Alzheimer’s disease.
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 you’re monthly benefit does not 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 as opposed to staying in your home.
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. And by making the right choice now, you can significantly improve the quality of your later years.
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 healthcare.
Canadians are saying that they don’t want to be a burden on their families and, overwhelmingly, they want to do the responsible thing.
Remember to always consult your advisor before taking any action.
Written by Stuart Kirk, CIM. Stuart Kirk is an Investment Funds Advisor with Manulife Securities Investment Services Inc and a Retirement Planning Specialist with Hicks Financial Inc. The opinions expressed are those of the author and may not necessarily reflect those of Manulife Securities Investment Services Inc or Hicks Financial Inc. For comments or questions Stuart can be reached at stuart@ghicks.com or 250-954-0247.
