Long Term Care Insurance Provides Financial Security For The High Cost Of Care
It’s not just diapers than can get expensive – Long Term Care Insurance can help
When I first started in the life insurance industry I worked with a Long Term Care Specialist at Clarica Financial (now Sun Life Career Sales) who told me, “To sell long term care insurance, you have to mentally put clients in the diapers.” What he meant was to really get people thinking about the process of aging and what care means, and how things start going wrong with the body, he had to make them see themselves at the very worst – having someone else change their diapers.
I have always found long term care insurance to be one of the hardest insurance products to talk about. For most clients the best time to buy the plan is in their 50s to early 60s. It can be very effective if bought in your 40s, but I have never been able to bring myself to talk to clients about care planning when they are so young.
Even into their 50s, clients are still looking and feeling young and fit, and the effects of aging are still decades away. But it is then that planning must begin otherwise the costs of starting a plan will become prohibitively expensive later in life, and you might get declined as you age. In order to see the need for long term care insurance, you have to imagine yourself as an old person; who is going to help feed you, care for you, and yes even change your diapers.
Why long term care insurance was created?
Long term care insurance came to Canada from the US where private health care and the lack of elder care beds in the public system made it a necessity. In Canada we have always felt like the provincial healthcare system would take care of us. What most Canadians are now beginning to realize is that our public healthcare system is not prepared for the current levels of elder care and will be completely overwhelmed when the baby boomer generation hits the elder care system. At present you have to be a category 3 or 4 long term care need to enter a government sponsored long term care facility. This is the highest level of need, and yet there are still waiting lists that go well beyond a year to get in.
Even when you make it into a government sponsored facility, it isn’t free. The costs range from as little as $53 per day to as much as $96 per day depending which province you’re in. This is just for a basic level of service in a government run facility (add more cost for more services, a la carte). If you chose to go to a private or semi-private facility the costs go much higher. It’s reasonable to budget between $3,500 and $5,000 per month EXTRA for long term care costs.
Why do I say EXTRA. That’s because when a couple ages together they usually don’t go into long term care at the same time. It is most common that men begin needing care first, and typically die younger than women. Women are then physically and emotionally worn out after helping to care for their aging partner for many years, and will need long term care themselves soon after. While all this aging and need for care is going on, the family home is still running, needing taxes and maintenance to be paid. The person not needing care is at home still living their life and paying for day-to-day expenses. The world doesn’t stop just because one person goes into long term care! Long term care is another layer of cost onto a fixed retirement budget.
Very often these extra costs take place in the home, with in-home nursing care, help with cooking and cleaning, and other assistance needs. In-home care has very limited government assistance programs, and so most of the cost is born by the individual or their families. That is another good reason for long term care insurance – if the person needing long term care assistance can’t pay for it, the next of kin is financially responsible to provide that care. This usually means your adult children must bear the cost of such care.
Who will most probably claim on these plans?
The statistics say the almost 50% of Canadians will need some form of long term care in their life with the need for facility care (in an old age home) being about 3 years. There is also a great deal of invisible care being done in Canada where spouses or family are caring for aging loved ones at home and have not yet entered the long term care system or accessed government services.
With the risks being 50/50 that you would need and qualify for long term care assistance, getting a long term care insurance plan seems like a good financial bet.
My story – long term care for my Granny and Grandpa
On my mother’s side of the family women tend to live into their 90s. This was the case for my Granny who lived to 91, but not without some major health issues. My Grandpa died much earlier, at age 77, from complications of Alzheimer’s. Here is their story in brief.
My Grandpa had built up a very successful business in South Africa and sold it before retirement. They went into retirement fairly wealthy, actually building and owning the townhouse complex they lived in. I remember Sunday lunches with them with full silver service table settings and four course meals. I had to always be on my very best behaviour.
My Grandpa began to suffer from Alzheimer’s when I was still young, about age 10. He had trouble holding a conversation and would often get frustrated and leave the room. They later sold their townhouses and moved into a gated senior’s community with small independent houses and a central lodge where he could get nursing care and meals when needed. He was later transferred into the lodge fulltime as he needed 24/7 care when the Alzheimer’s progressed. The last time I saw my Grandpa he was secured to a chair with a bolted in tray-table. He had a blank stare on his face and was unresponsive. When I said, “Goodbye Grandpa” I knew it was the last time I would ever see him. There seemed to be a brief flash of recognition and he looked up from the tray-table. I left the nursing facility and never saw him again.
My Granny lived way past my Grandpa. She was still fit and able well into her 80s. Then the first stroke happened, leaving her with some speech impediment and facial slackness. Everything else was OK. But that wasn’t the end of the strokes. She suffered from about 4 or 5 strokes as she aged each causing more and more physical and mental damage. At the end she was strapped to her bed in the nursing lodge to prevent her from falling on the floor. She could no longer think, act, or move on her own and needed 24/7 assistance with every basic function of life.
When she finally passed, my mother and aunt had to split the final bill from the retirement community, which was privately run in South Africa. There was nothing left from their wealthy estate. It had all been eaten up by their lengthy long term care needs.
Life Guard Insurance can help you plan for the care years
I’ve once heard it said that you don’t have a retirement plan without a care plan. There are really two retirements most Canadians will have. The first is retirement as advertised – foreign travel and enjoying the grandkids. The second is the care years, when health issues due to normal aging rob us of our independence. At Life Guard Insurance we have insurance advisors across Canada who are experienced in dealing with long term care insurance. Please contact us and we will match you up with a long term care insurance specialist.
The article was written by Mitch Reynolds. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article about long term care insurance would also be very much appreciated.