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

• How Much Does Assisted Living Cost?

  08/13/2015

  Assisted living has become increasingly popular with seniors who want to maintain an independent lifestyle while getting some help with daily life activities and reassurance that help is available round the clock, if required.

• Insurance Horror Stories: Bill Mantlo, Co-creator of Rocket Raccoon in ‘Guardians of the Galaxy’

  08/01/2014

  If you've already seen Marvel's latest summer blockbuster, Guardians of the Galaxy, or even if you've just watched the trailer, one thing becomes immediately clear: the scene stealer for the entire movie is an anthropomorphic, trigger-happy raccoon voiced by Bradley Cooper.

• Universal life and Long-Term Care Combination Plan

  10/05/2013

  Desjardins Financial recently made available a long-term care advance on its universal life foundation policies. 

• Would You Sell Your Life Insurance Policy to a Third Party?

  07/15/2013

  Selling your life insurance benefit for cash upfront to a third party is illegal in most provinces in Canada — except Quebec, Saskatchewan, Nova Scotia, and New Brunswick.

• Why Have Long-Term Care Sales in Canada Stalled?

  02/03/2013

  As reported in the mid-January 2013 issue of the Insurance and Investment Journal, sales of Long-Term Care Insurance in Canada continue to stagnate, and recent events have not helped matters.

• In a Fight With an Insurance Company: What Are Your Options?

  11/27/2012

  When you're in a dispute with an insurance company, what you do first should depend entirely on the type of claim you have. This could be a personal injury claim, a contractual claim, a long-term disability claim, or a property claim. They all lead back to the insurance contract, but there are different resolutions depending on the type of claim you have.

• Comparing the Four Types of Living Benefits Insurance

  09/12/2012

  Living benefit insurance is very different from life insurance because it pays out if the insured develops a type of injury or illness.

• Titan of Social Justice Could’ve Been Helped by Long-term Care Insurance

  10/30/2011

  Dan Heap is now a shadow of his former self.

• Manulife Financial’s Disability Insurance to Long-Term Care Conversion Feature

  12/10/2010

  Manulife Financial offers non-medical conversion from its Disability Insurance policies to its Long-Term Care Insurance program.

• Long-Term Care Insurance: An Under-Served Market

  01/23/2010

  
  Are advisors missing an opportunity
  with Long-term Care insurance?
  Photo by Edwin Kelly Tofslie

  Recent statistics compiled by the Life Insurance Marketing Research Association [LIMRA], and published in the January 2010 issue of the Insurance Journal,  have shown that there were only 7,847 long-term care policies sold in 2008 - marking a decline compared to the previous year. In total, there were only 60,000 long-term care policies in-force in Canada at the end of 2008, accounting for $80 million in annual premiums.
  
  Since there are 85,000 advisors licensed to sell insurance in Canada, the Journal's stats reveal that the average advisor sells less than one long-term care insurance policy per year.
  
  One reason for the low buy-rate could be the fact that Long-term Care costs are on the rise:

  Extensive long-term care costs an average of $5,000/month in provinces where the care isn't entirely subsidized by the government. Combine that with increasing cutbacks in service delivery nationwide, and the costs will only go up.

  
  You can get a free analysis of the different Canadian long-term care insurance policies by getting our Long-term Care Insurance Report or visiting our Long-term Care Quote Page. Additionally, you can contact us at 1-866-899-4849 for more details.

• Five Long-Term Care Insurance Myths

  12/19/2009

  
  Man by Michelle Tribe

  While the number of long-term care policies being sold in Canada is rising, the number of Canadians who are properly insured is still extremely low. In some instances, its due to misunderstanding and myth. The following are five myths surrounding Long Term Care Insurance:

  "My Family Will Take Care of Me"

  This would have been more likely years ago, when adult children tended to live closer to their parents and women stayed at home. In today's society, children may live across the country or, further still, across continents. Obviously, many women are now active in the workforce, with less time to fulfill the traditional caregiver role. Even if this is a feasible solution, many seniors prefer to have control over their care and don't want to burden their families.
  
  "Provincial Health Care Plans Will Cover My Bills"

  Provincial health have experienced major cutbacks in recent years. The last federal budget was focused on tax cuts, not health care, forcing provinces like BC to cut over 6,000 surgeries. Worse, the trend seems to be on rise.

  "Long-term Care Insurance is too expensive"

  Long-term Care Insurance premiums are lower, when younger you are. So, it makes sense to purchase coverage when you are younger and when premiums are more affordable. The monthly premium if you purchase coverage at age 45 can be as low as $50 a month. Whereas, the same plan for a 55-year-old would be over a $100 a month and for a 65-year-old would be over $200 a month.
  
  "Long-term Care Is to Hard to Qualify For"
  
  Underwriting requirements for long-term Care Insurance are very different from life or Disability Insurance. In most instances, coverage can be obtained without having to complete medical tests.
  
  "I'm Too Young"

  A lot of us think that only senior citizens need to worry about Long-term Care, so we put off preparing for the possibility. The fact is accidents or illnesses can strike at any age.

  
  People of all ages can develop serious conditions that require them to need assistance with routine daily activities for an extended period of time and the cost of care can be significant. Long-term Care Insurance can help cover the cost of the care associated with these illnesses and injuries while protecting your assets.

  
  If you have any questions please do hesitate to call us at 1.866.899.4849 ,or visit our Long-term Care Quote Page.

• Long-term Care Consumer Report

  12/02/2009

  
  Growing 2 old has never
  been easier with Long
  term care insurance.
  photo by Edwin Kelly Tofslie

  We're always surveying the latest and greatest in insurance plans available in Canada and today we're breaking down the advantages and disadvantages of some of leading long-term care plans in Canada. We do the work, so you don't have to.

  In 2008, LIMRA, a financial research firm, introduced stats that underscore the importance of getting long-term care insurance early. These include the following:

  Continue reading →

• Long-term Care Insurance: Why You Should Buy Now

  11/30/2009

  
  Thinking about Long-term
  Care? Don’t wait any
  longer, buy now.
  photo by Doug Sheffer

  Long-term care insurance was first sold in the U.S. in 1987, with Canada following in the early 90s, and there's still a limited number of Canadians with long-term care policies. That's why we have seven reasons why you should consider buying long-term care insurance now.

  Continue reading →

• Long-Term Care Insurance: The Top 5 Reasons People Claim Benefits

  11/30/2009

  For more details on long-term care insurance, policies in Canada, please contact us at 1-866-899-4849, or visit our Long Term Care Insurance Quote Page.

• LIMRA’s Long-term Care Statistics

  11/29/2009

  LIMRA's long-term Care statistics for 2008 shows that, while the number of long-term care policies being sold in the United States is rising, the number of Americans who are properly insured is still extremely low. The data they reveal include the following:

• Sun Life’s Long-term Care Plan

  11/20/2009

  Many Canadian insurance companies carry a Long-term Care plan, but we know how hard it can be to tell the differences between them all. That's why we've taken the liberty of breaking down three Long-term Care plans from three of Canada's leading insurance providers. First in this series is Sun Life Financial:

  Pros

  • Rolling five year guarantee (guaranteed to remain the same for five years).
  • Zero elimination period available for facility care.
  • No waiting period if there's a relapse of illness within 180 days of recovery.
  • Payment for the longer of 20 years or until the age of 55 is available.

  Cons

  • Comprehensive benefit has to be purchased for home care services.
  • The client must submit receipts to claim benefits.
  Continue reading →

• Manulife Living Care Underwriting Made Easy

  10/28/2009

  The following is a snapshot of Manulife's underwriting requirements on their Long-term Care plan called Living Care. They do have the right to alter those requirements depending on the insured's health history.

  Age 70

  • Living Care application

  • Telephone interview

  Age 71 or older

  • Living Care application

  • Face-to-face interview

  • The insured's doctor will also be contacted to verify additional medical information.

  As a rule of thumb, Manulife does not require lab tests as part of their long-term care application process.

  You can get additional information on Manulife's Long-term Care plans, along with other long-term care providers by contacting us at 1-866-899-4849.

• Manulife’s Long-term Care Plan LivingCare

  10/22/2009

  
    Photo by Benson Kua

  Manulife's Long-term Care plan, called LivingCare, is unique to the industry in that it is available on a single-life basis or a shared coverage option. Additionally, rather than having a set weekly or monthly benefit, Manulife allows the insured to choose a maximum benefit of up to $1,000,000 for single-life coverage or $2,000,000 for shared coverage between couples. The insured then chooses a benefit amount for single-life between 0.5% and 2% and for couples, between 0.25% and 1%. The amount is paid out for as long as the insured is on claim and it's to the point where it doesn't exceed the coverage amount. Waiting periods (how long until the funds are paid out) of 90 days and 180 days are available. Premiums can be payable for the insured's lifetime, or there is also a quick-pay option.

  Some other features of the policy include the following:

  1. Issue limits are between ages 18-80

  2. Policy fees are $75/year

  3. Premium payment durations are either pay for 15 years or pay to 65 (ages 80-50 only, and not available with shared coverage) pay to age 100. 

  The advantages of the policy include the following:

  1. Their unique shared coverage option.

  2. The plan is not receipt-based and the insured, while on claim, is free to use the funds however they wish.

  The disadvantages of the policy include the following:

  1. The premiums are not guaranteed beyond the fifth year. However, Manulife does not have the right to change premiums after the latter of 20 years, or when the insured turns 75.

  2. The miminum elimination period is 90 days. Most companies have shorter elimination period options.

  Below is an example of pricing for a 60-year-old, female non-smoker:

  $150,000 of coverage with a benefit option of 2%, i.e. a payout of $3,000/month while on a  claim and an elimination period of 90 days. The monthly premium is $222.31/month.

  You can get additional quotes and details by visting our Long-term Care Instant Quote Page, or contact us at 1-866-899-4849.

• Random Facts About Long-term Care Insurance Everyone Needs to Know

  10/21/2009

  
  Before you buy Long-term Care,
  there are some things you should know.
  image courtesy Ian Mackenzie

  There are certain things all potential applicants should know before buying Long-term Care Insurance. It's our hope that the following facts will arm you with the valuable information you need to make the right decision for you and your family:

  1. The first individual Long-term Care policies were sold in the U.S. in the early 80s, according to the U.S. Dept. of Labor, with Canada following suit in the early 90s.

  2. Only a handful of insurance companies offer Long-term Care Insurance in Canada and the plan features are not standardized. Therefore, it's a difficult product for brokers to deal with and not many do. Your best bet is to work with a broker who specializes in Long-term Care insurance.

  3. Long-term Care plans generally offer a daily or weekly benefit when the insured can no longer perform two or more of the following six basic activities of daily living: Bathing, Dressing, Toileting, Transferring, continence and eating, or is diagnosed with a cognitive impairment, such as Alzheimer's Disease. Penncorp is the only company in Canada that only requires the insured to no longer perform one of the basic living activities.

  4. Most Long-term Care policies in Canada have a five-year premium guarantee, after which time premiums can be adjusted on a class-wide basis. RBC Insurance is one of the companies to have a maximum premium after the fifth year.

  5. Long-term Care plans usually pay on a receipt basis, i.e. they reimburse the insured for expenses incurred while requiring assistance. Desjardins is unique, in that it allows the insured to spend the proceeds however they wish. This can be of value if the insured wants a family member or someone other than a qualified healthcare professional looking after them.

  6. Unlike life insurance, most Long-term Care plans do not offer a discount to non-smokers, i.e. they price smokers and non-smokers at the same rate. Some carriers even price males and females at the same rate. The latter provides a good value for males, but a poor value for females. Given the average female lives longer and is more likely to be on claim for a longer period of time than a male.

  You can get more details on Long-term Care Insurance, as well as a quote, by visiting our free, online Long-term Care Instant Quote Page, or by calling our office at 1-866-899-4849.

• Penncorp Life: One Step Long-term Care

  10/10/2009

  

  Penncorp Life Insurance specializes in disability insurance for self-employed individuals and small business owners. On Nov. 14, 2008, the company announced the launch of their Long-term Care plan, called One Step Long-Term Care.

  Other Long-Term Care plans in the Canadian marketplace require that the insured is unable to perform at least two basic activities of daily living. (washing, dressing, feeding, transferring, toileting and continence) With the One Step Long-term Care Plan only one incapacity, including cognitive impairment, allows the insured to take advantage of the best possible coverage. Given the aging population and a public health system increasingly under pressure, Canadians are becoming increasingly concerned about the issue of Long-term Care. 40% of those who are already receiving Long-term Care are not yet age 65 and after age 65, close to 50% of all Canadians will need this type of care.

  Features of the Penncorp Plan include:

  • The plan can be issued to applicants aged 30 to 70.

  • Benefit amounts can range from a minimum of $20.00/day to a maximum of $50.00/day.

  • Benefit periods are 80% of th maximum benefit for the first 720 days. At the end of the 720 day period the insured receives 100% of the daily maximum benefit for an additional 1,080 days (for a total of 1,800 days) after confinement begins.

  Advantages of the policy include the following:

  • As emphasizd above, the insured can qualify for the benefit if s/he requires assistance for only one of the six basic functions for daily living.

  • There are no policy fees associated with the plan.

  Disadvantages of the policy include the policy:

  • The maximum daily benefit for the plan of $50.00 a day, or $1500/month is quite low when compared against other plans on the market. By comparison, RBC Insurance, the leading Long-term Care provider in Canada offers maximum benefits as high as $300/day ($9,000/month).

  • There's also no premium guarantee on the policy premium. Most companies offer a premium guarantee for at least the first five policy years.

  The following is a quote for a 60-year-old female non-smoker
  

  Benefit amount: $50.00/day or $1,500/month

  Elimination Period: No days for facility care and 90 for home care

  Benefit Period: 80% for the first 720 days and 100% for the next 1080 days

  Annual Premium: $1,089.15

  You can get more details on Long-term Care insurance by contacting our office at 1-866-899-4849, or visit our free, Long-term Care Instant Quote Page.

• CARP’s Long-term Care Insurance Plan

  09/28/2009

  
  CARP offers Long-term Care insurance
  for its members.

  The Canadian Association for the Fifty-Plus (CARP), formerly known as the Canadian Association of Retired Persons, offers a Long-term Care insurance program to its members that is underwritten by Desjardins.

  The program offers essentially the same features and pricing as the plan offered by Desjardins independent brokers. The plan's premiums are guaranteed within the first five policy years and then subsequent premiums can go up on a class slide basis. The CARP Long-term Care program is also subject to a full underwriting. Although there are no discounts for non-smokers, there is a 10% discount when both husband and wife apply at the same time.

  Additionally, the Desjardins policy allows the applicant to select both their benefit period and their monthly benefit elimination period, giving them full control over their own financial destiny. The insured will receive their monthly benefit tax-free once they are either diagnosed with a cognative impairment, such as Alzheimer's Disease, or can no longer perform two or more of the six activities for daily living listed below:

  • Bathing

  • Dressing

  • Toileting

  • Transfering  

  • Continence

  • Eating

  The following is a sample pricing scenario for a 70-year-old female: *(Remember, pricing is the same for smokers and non-smokers.)

  A $2,000/month benefit, with a lifetime benefit period and a 90-day elimination period, is priced at $350.35/month.

  If Long-term Care insurance seems to fit your needs feel free to visit our non-obligation, free, Long-term Care Instant Quote Page. If you're interested in more quotes from Desjardins, or other Long-term Care insurance carriers, please don't hesitate to call us at 1-866-899-4849.

• Long-Term Care Insurance Underwriting

  09/21/2009

  
  Applying for Long-Term Care?
  Know what the underwriters
  are looking for.

  The underwriting criteria for Long-term Care insurance can be significantly different than for life insurance. Life insurance looks at mortality risks such as heart disease, build or lifestyle, but Long-term Care looks at mobility and cognitive issues. These factors can significantly increase the likelihood the insured will require care. The list below outlines some of the issues an underwriter will consider when evaluating a Long-term Care application:

   

  • Cognitive Status - The applicant's ability to think, perceive, learn, remember and acquire knowledge.

  • Chronic Illness - A persistent, prolonged or continuing illness requiring long-term treatment.

  • Medical History - Some medical histories may indicate a need for further care, such as those with osteoporosis or a history of falls and fractures.

  • Multiple Medical Problems - Medical issues that when taken together, can significantly impact the applicant's overall health to more of a degree than one problem alone, like diabetes with heart disease.

  • Chronological vs. Physiological Age - This is if there is a significant difference between the applicant's chronological and physiological age. An applicant may look older than the age stated on their application.

  • Frailty - This factor may be a signal that relatively minor accidents and illnesses may result in major health issues later on.

  Secondarily, the insurance provider will look at the following factors that may contribute to the applicant's overall independence:

  • Working full-time or part-time

  • The health of the applicant's spouse

  •  Family and friends are already living in the household

  • Volunteering at various clubs and/or organizations

  • Participating in hobbies and activities outside the home

  • The applicant's ability to drive

  • The applicant's ability to transfer or travel without accompaniment or assistance

  In many ways, Long-Term Care insurance is easier to qualify for than Life insurance. Each insurance company's health criteria is different, so it's important to speak with an independent broker who specializes in Long-Term Care insurance. You can also get a free, no obligation quote from our Long-Term Care Instant Quote Page, or feel free to call us at 1-866-899-4849.

• A Closer Look: Long-Term Care Insurance

  09/18/2009

  
  Manulife's 'Shared Coverage Option'
  is just one way you and your spouse
  can live out your twilight years.

  Nearly half of all Canadians over the age of 65 will need some sort of long-term care.

  While the government will cover some of these costs, there are limits not only to how much they will cover, but also the types of expenses they will cover. This is compounded by increasing government cutbacks on health care. In B.C., 4,400 MRIs will be cut in Victoria to cover a $45 million shortfall, while Vancouver is considering cutting more than 6,000 surgeries to make up for its own $200 million deficit. It's only a matter of time before Ontario residents will be feeling the pinch. The government also doesn't pay for private facilities, which can add up to thousands of dollars and erode a senior's financial nest egg.

  Long-term care insurance provides coverage when you need it most. Depending on the provider, the received benefit can be a tax-free daily or monthly benefit and coverage can be set up where income is received either for life, or a specific period. Many plans reimburse expenses, while others allow the insured to spend the money however they wish. The latter gives the insured the flexibility to select the care that's most convenient and suitable for their needs. They can use the money to help with ongoing care or to cover certain medical expenses that may only be partially subsidized by OHIP or a private health plan. Benefit amounts can range anywhere from $500/month up to an excess of $8,000/month.

  About two years ago, Manulife introduced a unique Shared Coverage option on its Long-Term Care plan for couples (married or common law). This helps support quality care for one, or both partners. The Manulife plan provides a monthly income, whether the care is at the insured's home or at a care facility.

  Most companies only have premium guarantees on the first five policy years. Therefore, in subsequent years, the premiums can increase significantly, but this would have to happen on a class wide basis.

  You can get a free online quote by visiting our Long Term Care Instant Quote Page, or please call us at 1-866-899-4849.         

• Long Term Care Insurance – Home Care vs. Facility Care

  04/18/2009

  Most Long Term Care insurance policies in Canada will pay a tax free daily benefit once the insured's physician provides certification that the insured requires care in a facility or at home because of his/hers inability to perform two or more specified activities of daily living — bathing, dressing, eating, maintaining continence, toileting, or transferring.

Posted by Chantal Marr.

Chantal Marr is a member of the Independent Financial Brokers of Canada.
Much of her success stems from her ability to listen to her clients' needs.
Read Chantal's background.