The COVID-19 pandemic has raised many issues. One of the most serious is the state of long-term care in Canada.
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?
We’ll answer 6 questions about how to plan for options for long-term care:
- What are your options for long-term care?
- Who is long-term care insurance for?
- What are the advantages and disadvantages of at-home care?
- What does long-term care insurance pay for?
- How much does long-term care insurance cost?
- Is long-term care insurance right for you?
(*Source: An Institute for Health Metrics and Evaluation study)
What are your options for long-term care?
If you become frail and can’t manage on your own or are dealing with worsening dementia, you could:
- Depend on your spouse
- Move in with a relative
- Rely on government-provided and private in-home care services
- Move into a long-term care or assisted-living facility
- Hire a full-time companion
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:
- in a nursing home or retirement residence,
- at home through community services,
- while living with your children, or
- with a full-time caregiver in your home.
Who is long-term care insurance for?
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, CFPTM, CHS, EPC, is a Sun Life advisor in Winnipeg. 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.
What are the advantages and disadvantages of at-home care?
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:
- Setting up schedules, sorting out conflicts and plugging last-minute holes.
- Finding ways to supervise and evaluate services provided.
- Doing the laundry and grocery-shopping.
- Keeping track of and driving you to doctors’ appointments.
- Making sure the bills get paid for services you must pay for. (That’s most of them, including meals, transportation and personal care above the regulatory minimum.)
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.
What does long-term care insurance pay for?
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:
- you can’t manage the activities of daily living (like bathing or dressing yourself) or
- your mental abilities have deteriorated.
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:
- whether you prefer live-in or live-out,
- how highly trained you need your caregiver to be and
- whether you need round-the-clock care.
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.
How much does long-term care insurance cost?
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)
Is long-term care insurance right for you?
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.
- Most Sun Life advisors now offer virtual services and provide consultations by phone or video chat. Find an advisor today.
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.