Long-term care insurance a valuable asset to employ

Long-term care insurance (LTCi) is still in it’s infancy in Canada. I do not think, Insurance Companies and Advisors are
doing a very good job marketing it at all.

Most of us know what long-term disability insurance (LTDi) is. So I am going to compare them because there are similarities. Basically, they both pay out a certain amount of money when you can’t perform your regular daily duties. That’s not exactly it, but it will help you to understand the concept/product.


  • Everyone gets older
  • People do get sick and/or disabled
  • Costs of services/goods will always increase

How long did it take you to plan your last vacation? If you would put at least the same time into your long-term planning it would pay off 10 fold. Statistics say that there is a 2/3 chance that a couple over the age of 65 will spend time in a nursing home or long-term care facility. For seniors that are not in a relationship, the chances are much greater.

What are the odds?

  • Your home has a 1 in 1,200 chance of being destroyed by fire
  • Your automobile has a 1 in 240 chance of being totaled
  • You have a 1 in 12 chance of being hospitalized
  • Think about this:

    How many homes have you seen burn down? And yet, we continue to buy home insurance.

Some of us are lucky to have some health benefits at work. Today statistics tell us people have several jobs during their working years. Fifty years ago, things were different. My point is that, sometimes, you will be without company benefits.

Having personal protection early in your career is critical to your livelihood; for several reasons, the main is obtaining it when you are young and healthy, and at that time you have the most to lose as well. I don’t know about your circumstances but
I know most of us have to work every day so we can pay our bills.

Statistics tell us that the average person uses their retirement savings as an emergency fund. Running out of money is a very scary thought and how about running out of money and being disabled and/or critically ill at the same time.

20 Years Can Change A Lot

According to the Bank of Canada, the average annual inflation rate over the last 20 years has been about 2%.

Two percent seems small, but over 20 years the cost of goods and service has risen about 50%.

Lets take a look 20 years into the future at the cost of a semi-private room in a nursing home in Ontario. Today it is about $1,900 a month and in 2032 it could be $2,800 a month, an increase of $900 per month and 10,800 per year.

In my opinion, it would help if to buy as much as you can afford or qualify for today. I am talking about LTCi. This type of insurance can cover you for the rest of your life. That is, if you buy the right kind.

Alzheimer’s in Canada:

2008 — 103,700 new cases per year
(one new case every five minutes)
2038 — 257,800 new cases per year
(one new case every two minutes)

Dementia in Canada:

2008 — 480,600 people with dementia
(1.5% of Canada’s population)
2038 — 1,125,200 people with dementia
(2.8% of Canada’s population)
(Statistics from Alzheimer’s Society of Canada)

Statistics tell us that 90% of people survive a heart attack and 80% of stroke victims survive. That means time off work. No money coming in, but the bills keeps coming, along with the extra costs.

I am sure you know one person who has suffered a critical illness/disability. Ask them about the out-of-pocket costs that add up.
Most think the government pays for everything. That is not the case for most Canadians.

Breaking Down Care

The following relates to October 2010, in
Ontario, for long-term care costs.


Government-subsidized nursing home/long-term care homes:

Nursing homes or long-term care homes are residential facilities that provide 24-hour nursing care and supervision. They offer higher levels of care than retirement homes and cater to clients who have serious long-term health care needs. They also provide short-stay (respite) services to provide family caregivers a break or to provide the resident with support — usually following a hospital stay.

Long-term care homes are owned and operated by various organizations including private corporations, or non-profit organization. All applications to long-term care homes are coordinated by the local community care access centre (CCAC). Once the CCAC has conducted an assessment to determine eligibility, the CCAC provides basic information about homes in the area and a client may apply to homes.

Fees for nursing homes are standardized across Ontario and established by the Ministry of Health and Long-Term Care (MOHLTC). The
MOHLTC provides funding for homes. The amount paid by residents for their accommodation is called a co-payment. If an individual can’t pay for the basic accommodation, a subsidy is available. The CCAC will assess whether an individual’s income can cover the cost of the nursing home based on their income tax returns. The monthly income of the individual, less $100, is taken to cover the basic accommodation cost and the rest is covered by the provincial government.

Retirement residences (no subsidy):

A retirement home is a multi-residence facility that provides accommodation and services such as meals and cleaning for older people. Each individual private retirement home has its own admission procedures, waiting lists and fees. Admission usually depends on the client’s ability to pay and absence of serious conditions that require professional nursing care. Generally,
private retirement homes have higher fees than government-subsidized nursing homes.

A private room was between $1,329 and $7,750 per month. One bedroom suites were between $2,400 and $9,000 per month.


Government-subsidized home care:
Home care services allow seniors to live at home for as long as possible. There are four main categories of Home and Community Support Services:
• Visiting health professional services
• Personal care and support
• Homemaking services
• Community support programs

Home care subsidized by the provincial government is administered by local Community Care Access Centre (CCAC). The local CCAC will have a case plan around the senior’s needs.

Private home care (no subsidy):

Since CCAC resources are limited, many seniors don’t get the care need from CCAC services and have to rely on private home care services.

• In-home meal prep ($12 to $29.90 per hour)
• Personal care costs ($12 to $30 per hour)
• Skilled nursing ($22.85 to $70 per hour)
• 24-hour live-in care ($18 to $30 per hour)

Adult day care programs:

Adult day care is a program, physically located in the community, to provide the elderly with a group setting during the day when family members aren’t available to care for them. Programs with meal and transportation cost $6 to $35.

(Information obtained from Taking Care Inc.)

LTCi isn’t available through every insurance provider, and different types coverage exist. Plans that I suggest for younger individuals usually have the following, because I believe they are valuable to have.

Income – style plan is the way to go; why would you want to submit proof of services?

Unlimited Benefit Period – gives us peace of mind providing access to an unlimited pool of money in case of a prolonged care need.

Inflation protection – if we are going to be using this benefit for decades we know that inflation can deplete our dollar today.

Service that is available 24 hours a day, seven days a week providing unbiased information about local care providers.

LTCi is not something everyone can qualify for, so before going through the underwriting process we should go through some pre-qualifying questions. If that goes well, then we would start the application process.

After completing the application with an insurance broker a nurse may interview you. They gather information about your medical
history and carry out cognitive exercises. The nurse may ask about: employment and hobbies; whether you live alone or not; medical details (eg. medications); your memory; or your ability to perform everyday activities.

Women Play an Important Role

As you know more and more women are working outside of the home today. Statistics say if women were to become disabled it would drastically impact the finances of the household and the stability of a family. Women in general live longer than men, but are
not without illness. Arthritis is more likely to effect women than men. Single women are more vulnerable to disability than married women, single men and married men. We can’t assume our children will be able to care for us today or tomorrow, as it naturally happened in the past.

If you need care, don’t spend your retirement savings or re-mortgage your home — let the insurance company pay for it.
Take the time to plan for your future. It is more important than planning a vacation.

Posted by Robyn Latchman