What Seniors Need To Know About Long Term Care Insurance
Long term care is a major concern of Canadian senior citizens and their families. Studies have shown that Canadians rank long term care second, behind saving for retirement, when prioritizing financial needs. Unfortunately, many Canadians do not want to think about needing long term care and, therefore, fail to plan for it. Others wrongly assume that OHIP or standard health insurance policies will cover the costs. As a result of this failure to plan, tens of thousands of Canadians are impoverished each year by the costs of long term care.
The best time to plan for long term care is before it is needed. Start thinking about long term care when you plan for retirement. If you are already retired, it is not too late to begin planning for potential long term care needs.
This article will guide you through the important process of selecting the right long term care insurance policy. This article provides information on long term care services, what to look for in a long term care insurance policy, and a glossary of terms.
Finding a good policy will take some effort, but the effort will be worthwhile. Here are some steps to take when considering the decision to purchase a long term care insurance policy:
- Talk to an insurance broker about whether long term care insurance makes sense for you.
- Ask your insurance broker to recommend a company and a policy.
- Check to make sure the insurance company you are considering is financially secure.
- Make sure your insurance broker is licensed to sell insurance in your province.
- Review all the details and options of the policy. Do not rely just on the marketing materials or outline of coverage.
- Make sure you understand all the provisions before you purchase any policy.
- Ask your insurance broker questions. Discuss policies with friends, family, and others whose opinions you respect. Take time when choosing a policy, and don't allow yourself to be pressured into making quick decisions. And remember: Never pay cash.
The decision to purchase long term care insurance is not a simple one, but thorough investigation and thoughtful planning now can offer you and your family financial protection for the future, and, most importantly, peace of mind.
Defining Long Term Care
Long term care includes a range of nursing, social, and rehabilitative services for people who need ongoing assistance. Most people in long term care facilities are older, but many young people need long term care during an extended illness or after an accident.
Assistance with routine personal needs such as bathing, dressing, eating, toileting, and taking medicine is the most common service. Facilities also provide skilled nursing and rehabilitative care, which is ordered by a physician and supervised by skilled medical personnel such as a nurse or licensed therapist.
Long Term Care Is Offered In A Variety Of Settings
Nursing facilities are the primary settings for people who require medical care daily or intermittently. You must have a physician specify needed services in a written treatment plan for admission to a nursing facility. Many nursing facility stays are short periods of recuperation from an acute medical episode such as a hip fracture or surgery.
Assisted living facilities or residential care facilities provide general supervision, housekeeping services, medical monitoring, and planned social, recreational, and spiritual activities for people who are still independent and ambulatory. Assisted living facilities do not provide medical care.
Facility care services include skilled nursing care, speech, physical, or occupational therapy, facility health aides, or help from facility makers. Sometimes, family members, or caregivers, provide most of the care with the help of facility aides and skilled professionals.
Adult day care services are available in many communities, providing personal care, skilled care, and recreational services.
Financial Issues And Long Term Care
The cost varies by the level of care needed, the setting where the care is provided, and geographic location. Nursing facilities, assisted living facilities, and facility care services provide different levels of care to different resident populations; therefore, costs are not comparable.
On average, round-the-clock long term care services in a nursing facility cost $40,000 per year, or $112 per day.
Assisted living costs vary dramatically—anywhere from $900 to $3000 per month depending on room size, amenities provided, and services required.
Facility care, if needed daily, also can be quite expensive. In 1996, an average facility care visit from a registered nurse (RN) cost $99. RN visits for facility care typically do not exceed 2-4 hours per day, so care is not round-the-clock.
Eight hours of adult day care can cost an average of $45 per day.
Nursing Facility Care: About one third of the costs of nursing facility care are paid directly by individuals and their families. Government programs may pay for some of your care.
Assisted Living: About 90 percent of the country's assisted living services are paid for with private funds. OHIP programs pay for some assisted living services.
When To Buy Long Term Care Insurance
Because premiums are based on age at the time of purchase, the younger you are when you purchase a policy, the less expensive the annual premium. These premiums for most policies stay level each year as you age. If you buy at age 55 a policy that cost $800 per year, you will continue to pay the same premium. However, if you wait until you are 65, the same policy will cost you $1,700 per year.
What To Look For In A Policy
The best policy for you depends on several factors, including your family arrangement, your financial situation, your preferences regarding long term care choices, and the level of risk you are willing to accept. There is no one best company or one best policy for everyone. You should select a policy that meets your needs.
Before you buy a policy, make sure you know the product you are buying and from whom you are buying it. Be sure your agent is licensed to sell insurance in your province. Consult friends, consumer guides, and information from your province's insurance counseling program or local agency on aging.