June 14, 2022
By Anne Levy-Ward
Read time: 5 minutes
There’s a difference between life expectancy and healthy life expectancy. You could live to 85 or beyond, but your health could worsen before that. The average Canadian could expect to live over 10 years with a disabling health issue.* If that happens to you, how will you get the care you need?
(*Source: An Institute for Health Metrics and Evaluation study)
If you become frail and can’t manage on your own or are dealing with worsening dementia, you could:
But you might not like any of those options. You might not have a spouse. You don’t want to burden your kids, especially if their hands are full with careers and family.
You’ve heard about the conditions the pandemic has revealed in some long-term care facilities. You might also want to avoid the risk of disease exposure in even the best-run places. And there are years-long waiting lists for care-home beds in many parts of the country, anyway. Unless you've saved up considerable amounts for private care, you may be left with only Option 3.
You might be in for a surprise. With the right kind of health insurance, you could get help with your long-term health-care costs in any setting. That means:
You might need long-term care if your health declines as you get older. Do you want help paying for that care? Then long-term care insurance (LTCI) may be the answer. LTCI can also help relieve emotional, physical and financial stress on your children.
Paula MacMillan, CFP™, CHS, EPC, is a Sun Life advisor. She says Clients “get” the benefits of LTCI, but she isn’t sure how fully they embrace it. “I think the pandemic will encourage deeper conversations,” she says.
With community-based, at-home care, you can stay in your own home and out of an impersonal, institutional setting. Depending on what your community offers, you can get help for many necessary activities. You can arrange for help with bathing and dressing. Or, if dementia is a concern, you can have full time supervision in your home.
It’s an excellent option for many people. The sheer variety of services and providers, however, can make organizing your care challenging. If you’re dealing with dementia or other cognitive impairment, the responsibility for managing everything may fall on your adult children. But even if they’ve outsourced much of the heavy lifting, it’s still difficult to care for ailing parents while working full-time. Your point-person needs to spend a lot of time co-ordinating and trouble-shooting. That could mean:
Sometimes, you can spend a whole morning on the phone putting out fires.
Wouldn’t it be great to have one, single person whose main job was looking after you? Someone with a car? Long-term care insurance can help make that possible.
If you qualify for LTCI benefits, you get a monthly payment to spend on whatever you need. Whether you’re in your own home, your child’s home or a nursing home.
Your policy will pay you if:
The amount you get will depend on the size of your policy. Some policies pay as much as $2,300 a week, tax-free.
The cost of hiring a full-time, dedicated caregiver depends on:
According to Comfort Life, an online retirement living guide, the cost for a personal support worker starts at about $25/hour, and rises for overnight care. You’ll pay more for a registered nurse. It’s a bit more complicated if you want live-in care. You can expect to pay about $2,000 for the maximum allowable 44-hour week, plus room and board. You’ll also have to pay a $3,000 one-time agency finder’s fee. As the employer, you’ll have to deduct for Canada Pension, federal tax, employment insurance and workers’ compensation, and pay the employer’s share as required.
Your advisor will explain the different combinations of coverage and optional extras. MacMillan says the average claim lasts four-and-a-half years (234 weeks). For information only, she provides these common examples for a Sun Retirement Health Assist policy with a one-year waiting period and an unlimited benefit amount:
Cost for 55-year-old man |
Cost for 55-year-old woman* |
What the insurance pays out |
|---|---|---|
$40.68 per month |
$64.04 per month |
$250 per week |
$76.86 per month |
$123.62 per month |
$500 per week |
$149.22 per month |
$242.73 per month |
$1,000 per week |
*The cost for a woman is higher. That’s because in general, women often live longer and may need care longer than men. (Source: An Institute for Health Metrics and Evaluation study)
To find out whether long-term care insurance is right for you talk to an advisor. You can discuss ways to plan for your retirement years – including long-term care.
This article is meant to only provide general information. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.
