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Cost of Care in Ontario and the need for Long-Term Care Insurance
Illustration by Sarah May Scott
Long-term care insurance is used to help the insured cover the cost of care when they are no longer able to care for themselves and become functionally dependent.
The cost of care can be significant. Below is a listing of the average cost of care in Ontario:
| Home Service | Cost |
|---|---|
| Meal delivery (per meal) | $5.18 |
| In-home meal preparation | $20.77 |
| Laundry/House cleaning | $19.93 |
| Personal Care (Bathing/Dressing) | $21.13 |
| Companionship/Supervision | $20.47 |
| Skilled Nursing | $29.45 to $69.00 |
| Occupational Therapy | $98.31 |
Source: Best in Care
Lorne’s Comments
The cost of care in Ontario is has risen dramatically in recent years. Long-term care insurance takes the risk out of planning for care. You receive tax free money when you need it most to the cover many of the above costs. Best of all, many of these policies can be paid up in a limited number of years or offer a return of premium feature in event the insured dies and a claim is not made.
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[…] Long-term care insurance is used to help the insured cover the cost of care when they are no longer able to care for themselves and become functionally dependent. The cost of care can be significant. We’ve put together a table with typical home services and their costs in Ontario. In our latest insurance tips article you can also read Lorne’s comments on costs of long-term care. […]
Assuming premium affordability is not an issue for Long Term Insurance (LTI);
Q1. Any need to buy LTI that pay benefit for LIFE ?
Q2. If no, what is the minimum number of years for benefit payout ? note; Heard MOST claims do NOT last more than 6 years, correct ?
Q3. Which type of premuim payment is better ; Limited 20 years or Ongoing payment for Life ?
Thank you,
Raymond
Hi Raymond,
Thanks for the questions -My responses are below:
#1 The risk of choosing a Long Term Care Insurance policy with a limited payout period is the insured could be on claim much longer than the payout. E.G. if an applicant has a 2 year benefit period and suffers a stroke and requires care for 10 years. He/she will be out of pocket for 10 years.
#2 The minimum number of years for a benefit payout i.e. benefit period is 2 years. Having a shorter benefit period lowers the applicants premium
3. The advantage of limited pay period is the policy can be paid up in a limited number of years. This can be a very big advantage for someone taking out the policy at a younger age. E.G. If the policy is issued at age 40 it would be paid up when the applicant is 60. Limited pay period policies have a higher premium.
I hope this helps! Best Regards … Lorne
Hello:
I am wondering if there is any major benefit to purchasing Long-Term Care insr. if one already has Long-Term Disability Ins.? Are they the same product? Or, are there key differences?
Thx,
Mara
Hi Mara,
Thanks for the comment. Yes Long Term Care Insurance (LTC) and Long Term Disability Insurance (LTD) are very different products.
LTD is used to replace lost income due to an injury or illness and the coverage generally expires at 65.
LTC is used to help cover the cost of care do to an injury or illness. Generally speaking the person would have to have more serious health issues to claim on a LTC policy. He/she must not be able to perform 2 of 6 functions of daily living. On the plus the coverage never expires and many policies can be paid up in a limited number of years. Many people will use LTC to supplement LTD insurance or to replace LTD as the insured approaches retirement. I hope this help.
Best Regards … Lorne
Hi Lorne,
if you have a LTC policy with a company in Canada and God Forbid the company is going into receivership or bankrupt What happen to my LTC Policy? Will someone take it over ? Or is there some sort of Government intervention like the Pension Guaranteed Fund in Ontario? I hope this never happen but this is a pure hypothetical question.
Thanks
Hi Rudy,
Thanks for the question. If your insurance company is a member of Assuris you would be covered as per below. Regards … Lorne
If your life insurance company fails, your Long Term Care policy will be transferred to a solvent company.
On transfer, Assuris guarantees that you will retain up to $2,000 per month or 85% of the promised Monthly Income benefit, whichever is higher.
http://www.assuris.ca/Client/Assuris/Assuris_LP4W_LND_WebStation.nsf/page/Individual+Long+Term+Care+Insurance!OpenDocument