Long Term Care Insurance

5 essential tips when buying a long term care insurance policy

Long term care insurance provides individuals with a weekly tax free benefit in the event that they would require assistance with 2 of the 6 activities of daily living. Those activities include bathing, dressing, eating, maintaining continence, toileting, and transferring (Check the appropriate policies for more details). The proceeds received from a long term care policy can help prevent individuals from having to deplete their saving and/or forcing their family into debt due to unforeseen or unplanned for medical expenses. There are several factors to investigate when determining which long term care policy is right for you.

  1. Does the policy have limitations on when and how you receive your benefits? Many LTC policies will payout only if you require facility care assistance.
  2. Determine the elimination period and/or benefit period which best suit your needs and budget. The elimination period refers to the amount of time which must pass before you begin to receive your weekly benefit, and the benefit period refers to how long you’ll receive that coverage for. Those 2 variables combined with your daily benefit will help determine your monthly premium.
  3. Determine if there’s a premium cap on the policy. Most long term care policies in Canada offer guaranteed premiums for only the first 5 policy years.
  4. Determine if you need any riders such as cost of living adjustment and/or return a premium rider. The former allows your benefit to increase in line with inflation, whereas the return of premium benefit returns the premium to your beneficiary in the event you pass away.
  5. Be sure to work with a trusted independent broker who can provide you with unbiased independent advice when purchasing a long term care policy.

Be sure to also check out our Long-Term Care – Basic Vocabulary and Definitions, as well as our Critical Illness and Disability Insurance Tips section.

    Long Term Care News

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    Lisa Harbinson wanted a new life insurance policy for her mother Joyce. She thought mom was paying too much at over $100 a month for a $10,000 term policy that she had borrowed money against and now it was time to pay it back. (1 of 85)


    1. […] 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. […]

    2. Judith 05/06/2013 at 7:11 pm

      I’m 60 year old female in good spirits. I recently moved to canada from the US to help my son and daughter-in-law with their growing family. I am a permanent resident here and covered by OHIP. However, as public healthcare is a relatively foreign concept to me, I’m not sure what sorts of coverage I should consider if at all. Im not in any hurry but like having my ducks in a row, as you can imagine. My question is re: long term care coverage? Can you explain pros and cons, with OHIP coverage in mind? Does it benefit me at all? Many thanks, J

    3. LSM Insurance 05/07/2013 at 7:29 am

      Thanks Judith. Long Term Care Insurance provides income usually in the form of a weekly income in the insured requires assistance with generally 2 of 6 functions of daily living. Some companies allow the insured to use the money however they wish, some require receipts and reimburse. The only real downside is the cost. Plans can be tailored to meet different budgets.

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