Long Term Care Insurance
What happens if you live too long? How do you pay for the care you didn’t prepare for?
Many do not take into consideration the cost of long-term care. The sad fact is is that many people think that the government will look after them and there is no need to worry about anything else because if they get hurt or disabled the government is just going to step in and pay for everything. (NOT TRUE!!) The availability of care that is out there is very minimal and the government is stretched to the limit. So then there are private agencies – which cost money… and the government is not going to pay for this for you, so you will end up having to pay and it is very pricey.
How does long-term care work?
Long-Term Care is similar to the disability tax credit – meaning that you have to provide proof that you can not look after yourself. Normally there are 5 activities of daily living to take into account:
Getting out of bed
Transferring position (ex. getting out of a chair and going to another location)
Going to the bathroom
Dressing and Eating
Those are your 5 activities of daily living and if you can not do 2 out of those 5, whether it’s for a mental reason – whether you have had a stroke, have dementia or alzheimers, or whether it’s for a physical reason – if you slipt and fell and broke a hip or leg, etc. You now have a claim if you can’t do 2 out of the 5.
The doctor or hospital will assign someone to make the assessment that you need care and the level of the care, which includes checking out your house situation. Do you need help getting dressed, preparing meals, washing, getting out of bed, etc? Then they will assign a personal support worker and/or nurse to come in and see you. They will assign them maybe 2 days a week and maybe they will come to get you out of bed at 6 am, because that is when they have the time (because the government is stretched so thin), but how do you get out of bed the other 5 days a week? What if you need support every day, what do you do then? Then it’s on your dime. You have to come up with the money to afford this. The best thing is to have your own personal support worker and pay for it yourself so that someone comes when you want and as often as you need.
Having your own Personal Support Worker
Costs money, and if you haven’t looked into Long Term Care Insurance this will be coming out of your investments or savings. This means disrupting your retirement plan or your estate plan in order to get you basic care. People spend years accumulating a nest egg to enjoy in their retirement… and it can be devastated if you need care.
When should one start looking at Long Term Care Insurance?
The best time to think about Long Term Care Insurance is around 55 years of age when you are starting to plan for retirement, it’s another guarantee to your plan. You can, however, get Long Term Care Insurance from age 18 onwards and like any insurance, it is way less expensive and easier to obtain the younger and healthier you are.
Is it easy to get?
It is pretty easy to get unless you are pretty bad health-wise. For example, type 2 diabetics typically qualify for the plan. There is a medical declaration, but no medical questions. It is also pretty affordable.
How the Long Term Care Insurance works
Long Term Care Insurance works like a reimbursable plan. You basically purchase a pot of money and you are provided with levels of coverage. Meal reimbursement… Just keep your receipts! (meals on wheels, ordering pizza, etc), Payments for house adjustments to make it more accessible, payments for crutches, wheelchairs, etc, various medical assistance, and you draw down on this plan till it is done.
It is designed primarily to keep you at home as long as possible, (statistics show you live longer while at home rather than in a long term care facility). It also works as a bridge between home care and the long term care facility. Long Term Care Facilities usually have an average wait of 5 years to get into. You can also attach a rider for an additional cost to your Long Term Care Insurance Policy that will pay for your Long Term Care Facility as well.
Check out Bill Munn and Sarah Bowie talking about Long Term Care Insurance on video: