Long-term care insurance makes payments to you if you need permanent care – whether in your home or in a long-term care facility.
At some stage of your life, you may need to live in a long-termTerm The period of time that a contract covers. Also, the period of time that an investment pays a set rate of interest.+ read full definition care facility or receive ongoing care in your home. This possibility increases the longer you live.
Long-term care insurance is designed to help cover this expense. It provides tax-freeTax-free Money that you do not pay tax on.+ read full definition payments to cover the cost of long-term care if you become physically dependent and require in-home caregivers or relocation to a long-term care facility.
2 key features
1. Payments are usually a set amount
The coverage usually pays a pre-determined dollar amount (for example, $100 a day) for each day that you require care. This money is paid to you regardless of the actual cost of the care. However, some policies reimburse expenses rather than pay a set amount.
2. Coverage is available at later ages
Long-term care insurance is available at later ages (usually up to age 80) than many other types of insurance. However, the premiums will be higher the older you are when coverage begins.
What are your care optionsOptions An investment that gives you the right to buy or sell it at a set price by a set date. The buy right is termed a “call” option, and the sell right is termed a “put” option. You buy options on a stock exchange.+ read full definition if you become physically dependent?
Can you afford to pay for this care if it is needed?
As of 2012, nearly half of Canadians aged 15 years and older (46%) had provided some type of care to a family member or friend with a long-term health condition, disability or aging needs at some point in their lifetime.
Source: Statistics Canada