Long-term care insurance has had a challenging time being accepted by Canadians. There has been many debates over the cost and value of the insurance; over how much is actually paid out by the time someone qualifies for the benefit. But while many of us (insurance professionals as well as prospective buyers of LTCI) assumed this coverage was to help with nursing home expenses, the reality is most claims are paid to people staying at home and being cared for by family members. Below is an article by Barbara Feldman that raises some points worth serious consideration.
The cost of long-term care can represent a significant expense for many Canadians, which is why long-term care insurance (LTCI) can help bring peace of mind. One thing to consider: LTCI isn’t just for people in long-term care facilities any more.
Karen Henderson, founder of Long Term Care Planning Network, notes that LTCI used to be called “nursing-home insurance,” although nine-tenths of Canada’s elderly and those suffering from chronic illness or disability are cared for by family members, and four-fifths of those suffering from Alzheimer’s or other dementias are cared for in their own homes.
From 85% to 90%of claims are paid to people living at home. According to a Conference Board of Canada report, less than 5% of Canadian employee benefits packages now offer LTCI. “It has to be better supported so that more Canadians are aware of the product,” Henderson says. “People are spending too long in retirement and living too long to ignore it.”
Henderson believes that once LTCI becomes a more established product for individuals, organizations might also begin to include it in benefits packages, but thinks that similarly to critical illness coverage, benefits will probably have to be capped, perhaps at $25,000 to $50,000. “That doesn’t go very far when you’re looking at needing long-term care for five or 10 years,” she says.
Current government programs will fund only about half of the baby boomer generation’s long-term care costs, estimated at almost $1.2 trillion. “What happens when we age is the largest threat to everything that we want in our lives,” says Tim Landry, living benefits specialist at QTR Solutions.
The likelihood that you’ll need the benefit is up to 50%, or 66.6% if you’re female, Landry notes. “There’s no way the government will have the money to look after us,” says Landry, “Beyond a basic level, you’ll get what you pay for.”
Photo credit: “Sweethearts” by Patrick on Flickr