Prepare For Your Long Term Care
The Planned and the Unplanned
A recent survey, conducted by Market Probe Canada, shows that more Canadians are concerned about the unexpected costs of care and protecting their assets. 57% worry about paying for care. 67% fear deteriorating health. 90% feel that preparing for one’s own long-term care needs is the responsible thing to do. One way to protect your savings, estate and quality of life is to be prepared for long-term care costs.
What is long-term care? Long-term care helps people who develop disabilities or chronic care needs maintain a level of functioning. For example, patients with arthritis, cancer, heart disease, or Alzheimer's receive help with walking, getting dressed, eating or bathing.
Who will pay for long-term care? Many people believe that the government will take care of all the costs and care services when they can no longer care for themselves. While the government may provide some assistance, there are limitations. In order to maintain a dignified quality of life, many people pay for long-term care services out of their own pocket – costs that can significantly impact your quality of life, savings and estate. Recent commentary from Ontario’s Health Minister, Deb Matthews, indicates a trend towards “income-tested” care, which could have so called “wealthy” seniors, paying much more for their care in the future.
How much will it cost? Many people prefer to receive care in their own home. The average Canadian cost for “lighter care” needs such as nursing assistance or homemaking is approximately $42,000, and $58,000 for a live-in caregiver. On the other hand the average accommodation cost to a private care nursing home in Canada is $60,000 and $30,000 for a government long-term care facility. These costs, however, do not include equipment or personal care items which add up quickly over time. So what are the options for preparing for long-term care costs?
1. Relying on the government to fund and provide all your care needs - Given the aging population and increasing demand on our health-care system, government benefits may be limited. This can be very stressful and costly from a financial, physical and emotional standpoint.
2. Relying on your own resources to pay for care - Most people want to avoid dipping into their hard-earned assets and savings, so it may be an attractive decision to put a plan in place that helps cover the costs of long-term care and avoid asset erosion.
3. Long-term care insurance - A relatively new insurance product in Canada, it provides a regular source of funds to pay for long-term care. In a recent survey, the main reasons people purchase long-term care insurance include:
- 82% do not want to be a burden on family
- 80% want the option of choosing where to receive care
- 76% want control over decisions about care
- 75% want to make sure their dignity is maintained
- 72% wish to preserve assets for their partner
- 71% want to ensure a high quality of care
- 61% wish to leave an inheritance for their children
Talk to your advisor today about maintaining your "dignity for life".
Susan Gottlieb CIM, FCSI, is a Vice President and Investment Advisor with RBC Dominion Securities Inc. Member CIPF, susangottlieb.com