The Costs of Long Term Care and How to Insure Against Them

Posted on February 7, 2021

With long-term care insurance, you can protect your retirement nest egg.

More than 50% of long-term care residents are over the age of 85. Most notably, there’s been a considerable increase in long-term care residents who are 95 years old or older during the last five years.

Many seniors under the age of 75 have experienced a brain injury or stroke. Resultantly, they require 24-hour care.

Among the older population, a considerable number of individuals have been diagnosed with dementia and unfortunately, many others will develop some sort of cognitive impairment over time.

Today, people live much longer, but may require a care facility earlier; and for a longer period of time. What this means is that it’s never been more important to consider a possible care plan should you wind up needing one in the future.

To learn more about the costs of long term care insurance and how to safeguard against them, keep reading.

Do You Need Long Term Care Insurance?

Each year, the life expectancy in Canada increases. Today, the Baby Boomer generation makes up most of the population. Most Baby Boomers are around 68 this year.

A longer lifespan is a great thing, and it results from living in a society where health and wellness is promoted for all ages.  It's great to see that Canadians are living much longer and are more focused on preventative care and exercise. What this means however, is that the longer we live, the more we need to retire on.  More to that, should we become ill, we would need our retirement savings to assist with the cost of managing our illnesses and or long term care.

Understanding Long Term Care Insurance

Long-term care insurance can provide some protection against health risks after retirement. This kind of coverage is not for minor health issues, such as glasses or a root canal.

Should you or your family need to submit a long term care insurance claim, it could be paid out in a lump sum or monthly payments.  You may receive the payment if you develop a condition covered in your policy’s critical illness clause.

The most common kinds of conditions covered by long-term illness insurance are cancer, heart attacks, and strokes. However, some policies might cover certain types of dementia, including Alzheimer’s disease.

Statistics point to the fact that physicians are more likely to diagnose members of the aging population with chronic health conditions. However, health conditions can develop at any age for any number of reasons.

A long-term insurance policy typically covers critical illnesses for individuals between the age of 65 and 75. However, some long-term insurance policies can provide coverage beyond that.

It’s important to understand the terms of long-term insurance coverage. Not all policies cover all conditions. However, if your physician diagnoses you with a condition covered by your policy, a long term insurance plan would payout as needed.

A Closer Look at Long Term Care Policies

The policy would cover your expenses if you were deemed to be unable to care for yourself. For instance, you might access your long-term insurance policy if you were to develop a chronic illness or disability.

You might also access your policy if you were to develop a cognitive impairment such as dementia. In most instances, you can access long-term care funds for most age-related conditions that prevent you from managing activities of daily living.

It’s difficult to estimate your long-term care costs throughout retirement. Today, someone could remain perfectly healthy until the age of 100. Conversely, people can develop chronic health conditions at a young age.

In this instance, these individuals usually need coverage beyond what their family or government benefits might cover. Typically, this scenario results in significant out-of-pocket costs.

Long-Term Care Costs

Long-term insurance policy rates can vary greatly between cities in the same province. Furthermore, a policy that covers memory care in the event you’re diagnosed with dementia may cost more than the standard rate. You may also pay more for a long-term insurance policy that covers one-on-one personal care or nursing assistance.

You may find that you need to pay additional costs for various services. For instance, you might pay a little more for a policy that covers physiotherapy.

Also, you might pay more for coverage for additional services such as dental, hair, and nail care. In fact, each extra service covered on your policy might contribute to the cost of your monthly premiums.

In Vancouver, a private memory care service costs about $4,388 per month. You’d pay about $52,656 per year for the service.

Meanwhile, you’d pay $5,400 per month in Toronto for the same service. There, private memory care might cost around $64,800 each year.

For professional personal care support, you may pay anywhere from $20 to $30 per hour. The national average pay for Canadian caregivers is around $18 per hour.

However, many personal caregivers work for agencies. The agencies mark up the hourly rate for service. For this reason, you would pay more for the service of a care provider.

Also, if you need special services, you could pay even more. For example, you might pay anywhere from $25 to $70 per hour for therapy or nursing services.

Protecting Your Income in Retirement

You can protect your retirement nest egg with long-term care insurance. Insurance for long-term care in Canada has been available for several years.

Typically, a long-term care policy will help you pay for assistance if you cannot perform two of the six activities of daily living. These activities include:

1. Bathing
2. Continence
3. Dressing
4. Feeding
5. Toileting
6. Transferring

If you have trouble with activities of daily living, a long-term care policy could help you to remain at home. With a policy, you could cover the costs of paying caregivers to come to your house to provide aid.

Alternatively, a long-term care policy might help to cover your rent at a long-term care facility. In Alberta, for instance, monthly fees at a care facility can cost $1,400 to $1,800 per month or more. Without long-term care coverage, that’s between $16,800 and $21,600 out of your yearly retirement income.

You can avoid this outcome, however, by finding the right long-term care policy. Smart planning can also help you to better prepare for retirement.

Smart Planning Starts With Smart Shopping

Today, many Canadian companies offer long-term insurance plans. Accordingly, it’s important to compare how plans pay for benefits. It’s also important to understand payment guarantees on premiums.

You’ll also need to compare the duration of payments. Furthermore, you’ll need to assess the benefit types offered by various plans.

For example, you’ll need to understand whether a long-term care plan provides comprehensive or facility coverage. Comprehensive coverage means that you’ll receive benefits no matter where you live. However, facility coverage will only cover your expenses if you live in a long-term care facility.

Today, many individuals could live in retirement for longer than they worked. Accordingly, it’s vital to plan for an extended lifespan so that you can make the most out of your retirement years.

It’s a lot of work finding the best plan for your needs. Fortunately, there’s a convenient tool available to help make the process easier.

Start Finding the Best Insurance Rates Today!

Now you know more about the costs of long term care insurance and how to safeguard against them. What you need now is a tool to make it easier to find the best long-term care policy in Canada.

Insurdinary is a financial comparison platform for Canadians looking to compare rates and save money on insurance products. 

With Insurdinary, you can find the information that you need to make educated decisions about various financial products. What’s more, we make it easy for you to access multiple quotes from the top financial service providers in Canada.

Contact Insurdinary today at 1-877-574-RISK (7475) or connect with us online to get the best insurance quotes and offers in Canada.

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