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Managing Your Money
Long-term care insurance – be sure it’s a part of your retirement plan
June 2005
Canadians are living longer – that's the good news. Statistics Canada says the fastest growing portion of the population is those 80 and over and that trend is expected to continue.
This longer-life expectancy is changing the face of retirement. When the age of 65 was established as the “normal” retirement age, life spans were shorter. Now the average 65-year-old retiree can be looking at more than a quarter century of retirement. That, of course, means retirement incomes will have to last longer. And here's some other not-so-good news: As your age goes up, so do the odds that you'll need more non-government-funded health care … perhaps even long-term care. Here are some unsettling health facts:
* One in four Canadians suffers from a heart condition or stroke-related illness.
* Stroke is the leading cause of moving from a hospital to a nursing home.
* One in three Canadians will develop a life-threatening cancer.
* Two-thirds of the cost of cancer treatment is not covered by provincial medical plans.
* One in 13 Canadians over the age of 65 suffers from Alzheimer's Disease.
* Almost 30 per cent of Canadians between the ages of 75 and 84 have a long-term disability.*
There is a misconception that all long-term care services are paid for by provincial health care systems – and although there are some financial assistance programs available for low-income individuals (usually requiring an asset test), the sad fact is that the cost for skilled nursing care, personal care and facility costs as well as supplemental costs for some medications, special equipment, adaptive devices and home alterations are in excess of funds provided by government. These services can add upwards of $2,000 to $4,000 to monthly long-term care costs.
Every one of us is vulnerable to a life-altering illness or accident that could require long-term care services. And there's no doubt a long-term illness could drastically affect the quality of life and the financial goals we've set for ourselves and our families. If you answer “yes” to any of these statements, you should look into long-term care insurance:
* I don't want to be a burden to my family or friends.
* I want access to quality health care.
* I want to protect my assets and pass as much as possible on to my spouse and children.
* I want to maintain as much control and independence as possible.
* I want peace of mind.
Long-term care insurance can provide tax-free benefits for expenses related to a physical inability or cognitive impairment. It can pay the costs of medical care, home care and medical expenses including daily care in an adult day care centre, 24-hour care in a long-term care facility, the services of a Registered Nurse in your home, homemaker services, and respite care that allows a caregiver to take a break from their caregiving services.
There is no doubt that long-term care insurance can help you to make better decisions about your future. It can help you decide whether you want to stay in your home or move into a long-term care facility – and it gives you the security of knowing you have taken steps to get the quality of care you need without becoming a financial burden on your family.
Be sure to consider long-term care insurance as a vital part of your overall retirement plan. A financial or insurance professional can help you select the type and level of long-term care coverage – and perhaps critical illness insurance and disability insurance coverage – that's best for you.
* Sources:
Heart & Stroke Foundation 2001
National Cancer Institute of Canada : Canadian Cancer Statistics 2000
Statistics Canada for the Division of Aging Seniors, Health Canada 1999
This column, written and published by Investors Group Financial Services Inc., is presented as a general source of information only and is not intended as a solicitation to buy or sell investments, nor is it intended to provide professional advice including, without limitation, investment, financial, legal, accounting or tax advice. For more information on this topic or on any other investment or financial matters, please contact your Investors Group Consultant. Insurance products and services distributed in Quebec by Les Services Investors Limitée (a financial services firm), and elsewhere in Canada by I.G. Insurance Services Limited (insurance license sponsored by The Great-West Life Assurance Company).
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