Successful Long Term Care Planning

31 May

“Old age is like everything else. To make a success of it, you’ve got to start young.” Fred Astaire 

It’s finally spring: Mother’s Day has just passed and on June 18, it will be that special day for Fathers. If you have parents still alive, it’s wonderful to be able to show them your gratitude for the care they have given you over the years. Your parents are sadly no longer here? You likely pause to remember them on their special days. I know I do.
 
Happy senior coupleWhether or not you are single or a parent, you may be thinking ahead to your own later years and retirement. Do the statistics on our aging population cause you to think about paying for long term care?  Have you contemplated how you will cover the costs of care in your later years and how this factors into your retirement cash flow?

Perhaps you are already looking after aging parents: The Ontario Long Term Care Association provides statistics showing that currently 5% of Ontarians over age 75, increasing to 8% by 2027, and we know that the percentages will continue to rise going forward. These numbers are putting a strain on the facilities available to care for our aging population.
As Fred Astaire said, it’s best to start young preparing for old age. Long Term Care Insurance (LTCI) is one way you can provide protection for the time you might need financial resources to cover costs of assistance with activities of daily living such as:
  • Bathing
  • Dressing
  • Toileting
  • Transferring, e.g. moving in/out of bed, or getting up from a chair
  • Maintaining continence
  • Eating
Unfortunately, you could need assistance with these activities if you are injured, recovering from a fall, disabled or suffering from dementia, and so on.
 
LTC insurance benefits can give you flexibility and control so you can pay for this needed support without having to borrow money, deplete your retirement savings or sell your house.

Costs of LTC in GTA*
A private room (not a suite) in a Long Term Care Facility where you get round the clock assistance has a cost which varies from $1200 to $6000 depending on the facility and the amount of government support available. Many Canadians believe that the government will cover all costs but this is certainly not the case.
 
Similarly, if you are able to live at home but require paid support from a Personal Support Worker, the hourly charge could range from $25 to $30, with nursing care running as much as $90 per hour. That cost can also add up quickly depending on the type of care and number of hours needed each week.
 
What does LTCI cost?
I verified the premiums for a Long Term Care Policy with one of Canada’s most reputable carriers and the following are the rates for coverage of $300,000 for a female:
 
Age when purchasing the policy       Annual premium                 Monthly premium
Age 40                                                   $1030                                    $93
Age 50                                                   $1523                                    $144
Age 60                                                   $2777                                    $250
 
These rates include waiver of your premium so that you don’t have to pay premiums once you are collecting benefits, but not Inflation Protection, which can be added. Some policies also provide for pooled coverage for couples. Importantly, many policies offer the possibility of a premium refund if you never need the coverage and that refund can be part of your estate plan.
 
Do you have a Critical Illness Policy? Many insurance providers allow you to convert this to LTC insurance between the ages of 60 and 65 without having to answer questions about your health.
 
Has this newsletter made you stop and think about your own needs or those of your parents? I can provide more information, a Cash Flow Plan, and personalized quotations to help you decide if Long Term Care Insurance should be on your horizon for successful old age. Call me at 416-939-2000 or email me at mheenan@assante.com.
 
It’s just good advice.
 
*Information on costs was obtained from: