An opinion on long-term care insurance

Maybe this is a good time to remind everyone that long-term care truly is ‘a family affair’.

In our country, 90% of care is undertaken by family in one’s own home and 1 in 5 caregivers still provide care to their loved ones even when in a care facility. As well, 80% of Alzheimer’s-dementia persons are cared for at home, usually by a spouse.

“It upsets me!” “It upsets my family!” These are the two major barriers recently identified for not having a conversation about our future long-term care! Shockingly, the majority of couples have not talked with their spouses yet about the three key aspects pertaining to their future care:

– – Their options when they need some care and related costs

– – What they expect of their family members

– – How their future care is to be paid for

Many people ask me about long-term care insurance (LTCI) as a method of financing some of the costs of our potential future care. I’m not a planner, insurance agent or broker, nor do I work for any insurance company, so I can only express my understandings as a consumer with years of care-related experience.

1 in 4 Canadians retire because of a health issue. 1 in 4 of us will have a long-term disability while 8 out of 10 of us when elderly will have a chronic health problem. So, I view my future long-term care like I do any other risk. I own house insurance (the chance being 1 in 1200 that my house might burn down) and I own car insurance (the chance, 1 in 240 that there might be a catastrophic crash). And I own LTC insurance (the chance is 1 in 2 that I will need some care in my future). LTC is the single largest out-of-pocket cost for adults over 60 therefore it is a significant financial risk too.

Naturally I won’t be disappointed if I never get to claim against my house insurance after years and years of paying for it. And that’s my attitude toward my long-term care insurance too. (Great, I won’t have needed it!)

LTCI is an insurance program designed to help the insured, you/ me, provide for our own care in cases of chronic illness, disability, an accident or as a result of growing older. (LTCI is not just for seniors — care may be required at any age.)

It provides coverage for times when we can’t manage the essential physical activities of our daily living (ADLs) on our own, such as feeding, dressing, bathing, toileting and walking, as well as moving from a bed to a chair. However, mental incapacities can be covered as well. It is important to understand the importance of the ADLs since the inability to perform a certain number of these ADLs or to pass certain mental tests is how insurance companies decide if we are eligible to claim and receive the benefits of our policy.

The experts tell us that we should own a long-term care policy for the same reason we buy life insurance, because we love our family, and without it, our family could be seriously affected, in some cases devastated. We are going to be taken care of one way or another, but it is our loved ones’ lives that will be changed dramatically without some planning on our part — it’s all about consequences. It is often said that ‘LTCI doesn’t replace a family’s love, it complements it’.

We need to consider this type of insurance since many of us couldn’t afford to pay for all our care needs over a long period of time as that care, wherever it may be, could be costly. Because provincial government care-initiatives are limited and can change over time, it isn’t a good idea to put ourselves in a position of dependency on government programs and services.

Of course, none of us want to become a burden. We’ll want choices, as one gentleman said, ‘I would like to choose where I go rather than be taken there’. We may also consider LTCI to protect our estate. For me, peace of mind is extremely important since I want to ensure that I have all in place in my retirement and LTCI fits as a piece of that plan.

We should buy LTCI ‘sooner rather than later’ (as my best friend who is an insurance agent tells me, ‘better 5 years too early rather than 5 minutes too late’). One must be ‘health eligible’ to qualify, but, and this is an important but, even if you have a certain health problem now, it doesn’t mean you won’t qualify, so always ask.

We should buy a policy that allows both ‘home care’ and ‘facility care’ — trying to have our bases covered — and don’t forget to ask about spousal discounts and inflation coverage.

LTCI polices aren’t one type. Different companies sell policies that combine features and benefits such as benefit periods, 1-2-5 years or lifetime. Also, the amount of daily benefit you can purchase can range ($100-$300).

And insurance companies pay differently too. Some pay a lump sum monthly up to your limit; some pay the amount of the care-bills actually incurred monthly upon submission; and there are even income policies. It’s important to ask specifically about the policy’s payment methods as you’ll want the best for your situation.

A key question always asked is, ‘What does it cost’ . . . ‘That depends’ I usually respond . . . think of it like buying a house, what features do you want, your LTCI policy is ‘customized’ to fit your circumstance. Since I have been in situations where I’ve had to pay the care bills every month for years, I also discovered that an LTCI premium is less expensive than actual care costs. Of course, it is best to buy prior to age 65 as costs are age-based, the younger you buy the better!

Certainly cost is always an obstacle, but I would rather make do without some other big-ticket item in my life than this particular insurance plan given our demography, economy, health system budget concerns, marital status changes and our tendency toward long life.

LTCI is a complex product, but we shouldn’t be in denial that we’ll probably need some demanding care in our later years when ‘our biological warranty’ is running out. I recommend you investigate LTCI by calling a qualified insurance agent or financial planner. You may also go to my website and link to the reputable insurance companies that offer this product in order to learn more.

Wishing you good decision-making, Patty

Patty Randall, a professional speaker, media comm entator and author, is widely considered a leading authority in Canada on all the practical ways to plan for your own or a loved one’s care-years. To learn more visit her website www . longtermcarecanada.comor e-mail her at pattyr@telus. net

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