Long-term care planning can provide more benefit to families in the long run than life insurance alone, says expert
As the population of seniors continues to grow by 225,000 each year in Canada, it’s no wonder the need for collective dwellings focused on special or long-term care is in such demand.
Statistics Canada reports that over 350,000, or 7.1 per cent of seniors aged 65 and over are currently living in long-term care facilities such as nursing homes, chronic care facilities, and residences specifically for senior citizens. For older adults aged 85 and over, the number jumps substantially to 29.6 percent.
Though there are B.C. government-subsidized facilities that can range from $19,000 to $25,000 per year, these spaces fill up incredibly fast leaving only the private long-term services available to those in need, which can easily cost upward of $ 40,000 annually. Home-care can be equally expensive—a caregiver for personal care or meal preparation is up to $21/hour, skilled nursing ranges from $29 – $69/hour and an occupational therapist costs an average of $98/hour.
According to Dawn Silzer, life insurance specialist at Envision Financial, a division of First West Credit Union, the benefit of Long term care insurance might outweigh that of life insurance.
Silzer urges you to consider the following:
“Given we are now living longer than ever before due to healthier lifestyles and medical advances, it’s even more important that families understand the difference between long-term care insurance and life insurance,” says Silzer. “The costs associated with long-term care can take a considerable chunk out of retirement savings resulting in little or no inheritance to pass on to their families.”
“Long-term care insurance will provide you with the means to choose from a variety of long-term care choices,” says Silzer. “When you have the financial resources available to select where and how you receive care, you can rest easy knowing that you’re in control of the important decisions that affect your wellbeing.”
“With many families balancing caregiving needs for their children and their aging parents, it’s not uncommon for these individuals to purchase long-term care insurance for their aging parents,” says Silzer. “Knowing that you have plans in place to look after your parents can take a huge weight off your shoulders as your parents grow older and are in need of more care than you alone can provide.”
How benefits are paid
“Each insurance provider has slightly differing long-term care policies requirements; however, the vast majority of plans will begin paying benefits when you are no longer able to do two of your daily living activities,” says Silzer. “Those activities include such things as bathing, eating, dressing, toileting, transferring, meaning the ability to move in and out of a chair without help, and continence. Cognitive impairment also makes a list.”
The types of policies available
“It’s important that you’re aware of what each policy type covers and how your benefits will be paid, explains Silzer. “Some policies are reimbursement based, whereas you submit expenses and are then reimbursed by the insurer. Other policies are indemnity based—you’ll be provided with a pre-determined daily amount for qualifying treatments. Finally, the most flexible of the three is an income-based policy where you receive a monthly benefit to be used in any way.”
Your unique situation
“Planning for the future is not a one size fits all solution,” says Silzer. “Before making any decisions, I would suggest sitting down with a life insurance expert, reviewing your financial plan, and seeing what mix of insurance makes sense for your situation.”
About Envision Financial
Envision Financial is a premier provider of banking, investment and insurance services for residents and businesses throughout the Fraser Valley, Lower Mainland, and Kitimat regions. As a division of First West Credit Union, B.C.’s third-largest credit union with 54 branches and 38 insurance offices throughout the province, Envision Financial brings innovative products, an extensive branch network and local decision making to the banking experience. Visit envisionfinancial.ca for more information.