Long-term Care Insurance



Posted: Tuesday, August 24, 2010

by Lorne Marr
LSM Insurance

There may come a time in our later years when we cannot live just on our own. If you read the statistics, every other Canadian is expected to need long-term care after they are 75 years of age. As lifespans increase and the population ages, it is in our own best interest that we take care of these matters at an early age. In this article, we are going to give you an overview of the purpose of long-term care insurance, as well as concisely introduce policies from three different prominent carriers to help you with comparing.

What is long-term care insurance?

If you can't do any two of the following general six activities:



on your own (the exact activity list depending on your individual policy), then you qualify for your benefit from long-term care insurance. Your policy will pay you the agreed tax-free benefit each week to help ensure that you get suitable assistance.

Long-term care coverage can help avoid that retirees and their children have to endanger their savings and/or force their family into taking on debt due to unforeseen or unplanned for medical outlays. Unlike Life Insurance, most Long-term Care policies do not normally offer a discount to non-smokers, nor do they make a distinction between female and male clients.

How to choose your long-term care insurance policy?

Several factors to inquire about when you are picking a long-term care insurance policy:

You should start by finding any exclusions in the policy as to when and how you get to your benefit. Many policies only pay out if you require facility care assistance! As the next step, attempt to estimate how much money you will need to pay for your care and for what period of time. You may choose to implement a policy delay elimination period which will have you fund your care from your own savings for a pre-determined time before the policy kicks in, thus lowering the monthly premiums. Also, check if the policy offers guaranteed premiums and for how long. Make sure to ask about any riders of interest to you and consult your choices with your broker.

Comparing insurers' offers

Among leading Long-term Care providers in Canada are the following: Ontario Medical Association/Sun Life, Penncorp Life Insurance, Manulife Financial, RBC Insurance, Desjardins, and Blue Cross. We'll briefly look at some of them now.

Ontario Medical Association (OMA) offers a long-term Care insurance policy to you and your family members 21 to 80 years of age. The policy is in fact underwritten by Sun Life Financial and the cost is equal to Sun Life's. The plan has a rolling five-year guaranteed premiums and a possibility of no elimination period if you need facility care. The plan will only pay when you provide receipts. Males have preferred rates.

Penncorp offers a so-called One Step Long-term Care, which pays the benefit already upon only one incapacity (as opposed to the usual two), including cognitive impairment, which allows the client to enjoy the broadest possible coverage. This feature is the plan's specialty in the Canadian market. One Step Long-term Care Plan by Penncorp is open to individuals 30 to 70 years of age. There is no premium guarantee on the plan premiums.

Manulife is banking on the simplicity of the application. Manulife's policy is named Living Care. In order to apply, the client is only required to fill in an application form and attend an interview by telephone if she or he is less than 70, and it should be conducted in person if she or he is 71 or older. In case of older applicants, a doctor may be contacted in order to verify some additional medical information. As a rule of thumb, Manulife hardly ever requires laboratory exams when you are applying for long-term care insurance. The plan is not receipt-based and it has an elimination period starting at 90 days, which is longer than most competitors.

At Desjardins, the rates are more expensive than competition. You have the money at your own disposal and don't have to provide receipts. Premiums are only guaranteed for the first 5 years and lower for males.

Unfortunately, it isn't easy to find your way through all of the insurance offerings in the market. Go to a broker you trust to help you out.

Looking for more details? Please read our guide on Buying long-term care insurance.

Prepared by Mr. Lorne S. Marr, an independent insurance broker from Toronto. His LSM Insurance works with companies, such as Standard Life Insurance and Manulife Financial Life Insurance.
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