Long Term Care Insurance – 3 ways to Protect Your Retirement

Long term care insurance

A lot of people believe that if they need long-term care, either in a facility, or perhaps in their home, that much of the cost will be paid for by government programs. While there are some programs available, many Canadians have found out that they will have to bear the majority of these costs on their own. I recently toured a private long term facility that looked nice, but the monthly cost was $9.000.

Justin and Sandra had been enjoying the retirement for 10 years, when Sandra developed Alzheimer’s. Justin was able to look after Sandra for a little over a year, but ultimately Sandra had to be moved to an extensive care facility. The cost turned out to be $2,600 per month and Justin was forced to take an additional $50,000 per year out of his RIF to cover this. Within six years, his RIF had been completely exhausted.

Another couple, Bob and Terry, had retired when Bob turned 62. They had only enjoyed their retirement for a few months, when Terry’s parents ran into difficulties, and were no longer able to take care of themselves, and needed to ask for help. Bob and Terry were sympathetic to their plight, and extensively renovated their home to accommodate her parents and to help out.

Within a month of her parents moving back in, Terri became a full-time caretaker, as her mother was hurt after falling and breaking her leg. Bob took on part time work to help pay for the additional costs.

Wendy is concerned about the constantly increasing cost of long term care facilities, and the limited availability of these facilities given how many baby boomers are moving into retirement. She was made aware of these costs from the care of her mother, who had needed to live in nursing homes. After several years of care her mother’s savings were exhausted, and her mother had to sell her home to keep covering these costs. The proceeds from the home also became exhausted, which made for a difficult situation. Her mother was embarrassed and worried by the cost of her care.

Wendy was touched by the plight of her mother, and does not want the same situation to happen to her. She does not want to become a burden to her family, or her friends. She has researched what other alternatives might be available.

She has decided that a better way to cover these unexpected costs is long term care insurance. The premiums are affordable, and if she needs this long term care, the insurance benefits are paid directly to her.

As with any insurance policy, one has to qualify before the benefits are paid. A long term care insurance policy will typically pay out if the insured is not able to look after herself or himself because of cognitive disability, or the inability to do two of the daily necessary requirements for daily living which include bathing, eating, toileting, dressing, or mobility.

Several of the up-to-date disability insurance policies can be converted on a guaranteed basis to long term care insurance at a specified age. This is an important feature that should be sought out. Some companies with excellent long term care policies include RBC, Manulife, Canada life, and Great West Life, BMO and Ivari.

Long term care insurance can help to protect you and your spouse’s retirement assets, so that you can enjoy the retirement you had planned for with all its benefits. Long term care insurance can protect your dignity, choices, quality of life, and most importantly, your independence.

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