Long Term Care (LTC) Insurance provides you with the money for hiring assistance when you can no longer perform some or all of the tasks of daily living like bathing, dressing, feeding, toileting, transferring, continence or when continual supervision is needed due to deteriorating mental ability. It either reimburses a person for costs incurred, up to a maximum, or pays a monthly lump sum when the person becomes eligible. This may be determined by the insurance company, a board, their doctor or your family doctor, depending on the policy you have.
It is not health insurance and will not pay hospital, surgical or medication expenses. It is insurance that can be used while you remain at home to enable you to pay for support you need and, depending on your policy, may assist with payment for Assisted Living Facilities, Adult Day Care, Nursing Homes and Retirement Communities.
According to a 2005 study done by the Council of Ageing of Ottawa, 43 percent of Canadian adults over 65 will spend some of their remaining years in a nursing home or long term care facility with the average stay being three to four years. One in five will stay more than five years. Long Term Care Insurance would enable a person to stay in their home instead of a facility for longer periods of time, allowing them to hire people to come to them for the services they need. It may also mean the difference between affording a four-person room or a semi-private or private room in a facility. This could mean a huge difference in the quality of life a person will have.
For many people, LTC Insurance may help protect their assets, help them avoid the need to go on Medicaid, preserve their standard of living, avoid financial and physical dependence on family and may allow them to choose what care they want, how often they want it and how it should to be delivered. In very basic terms, it may mean the difference with being allowed a bath once a week to bathing more often; or the ability to receive assistance should you be at your child’s home for Shabbat instead of needing your child to assist with your basic needs when visiting.
Government Home Care has a certain standard of care that varies in different Provinces and States. LTC Insurance will enable a person to expand on that care and suit the care to their individual needs. For example, Government Home Care may specify the amount of bathing time per week (as mentioned above) along with how and when transfers are done, bandages changed, and how much say you have in who will attend to you. As I understand it, in both the U.S. and Canada any government home care that is provided for you is done so according to standards of care guidelines determined by the government and or home care agency. Any changes to suit the individual is often very difficult to make.
LTC Insurance can become expensive if you take out a policy later in life. Like most policies, the younger, you are the cheaper it will be. On average, at age 50 a policy that pays $100 a day may cost between $50 and $100 a month (according to an article in the Montreal Gazette on February 19, 2007). The same policy at age 60 increases to almost double, and at 70 can be over $230 a month. Many feel that an optimum time for taking out LTC is 55. Others would suggest it for you in your 20s when premiums are at their lowest and the policy can be paid off during your early working years. Many policies have a maximum payment time and are paid in full after 20 or 25 years, though they remain in effect for the person’s lifetime.
Premiums never increase because of usage. Some policies waive premium payments while you are collecting benefits, whether from a broken leg or a devastating illness. Some offer a beneficiary payment, should the person have been fortunate enough to never have needed the benefits of their LTC Insurance.
LTC Insurance may be more costly for women than for men as women tend to claim earlier and more often and for longer periods of time than do men. Generally, 37 percent of benefits paid out are a result of accidents and 26 percent are a result of illness (according to Sun Life Financial).
It is not recommended to buy LTC Insurance if you cannot afford the premiums, have minimal assets, qualify for Medicaid or your source of income is a Social Security benefit or Supplemental Security Income (SSI).
Disability Insurance and Health Insurance will not cover the specific needs looked after by LTC. Disability Insurance is designed to replace some of the lost income when you are unable to work. Health plans may cover some of the skilled medical services you need when you can’t care for yourself after an illness or injury, but the coverage is usually for a limited period and only as long as you are showing improvement. Many deal only with your specific medical needs and not your personal care.
Next week I’ll discuss further benefits of choosing a LTC policy.
My thanks to Terri Allister and Hettie Pfeiffer ([email protected]) for giving me their time and expertise on the subject of Long Term Care insurance.
You can contact me at [email protected].
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