The Ultimate Guide to Long-Term Care Insurance in Canada

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    Long-term care insurance can be an essential part of your financial planning. It provides coverage for the care that you may need in case you are unable to care for yourself due to a chronic illness, disability, or other conditions. In Canada, long-term care insurance is becoming increasingly popular as people realize the need for coverage against the high costs of long-term care. If you’re considering long-term care insurance, it’s important to understand the types of policies available, how they work, and how to choose the right one for your needs. In this guide, we’ll explore all these aspects of long-term care insurance in Canada to help you make an informed decision.

    Factors to Consider When Choosing a long-term Care Insurance Policy

    Choosing the right long-term care insurance policy can be a daunting task. There are many factors to consider, such as the level of coverage, the cost of the policy, and the financial stability of the insurance company.

    One important factor to consider is the waiting period before the policy pays out. Some policies have a waiting period of several months before they begin to provide coverage, while others may have no waiting period at all.

    Another factor to consider is the level of coverage. Some policies provide coverage for a wide range of long-term care services, while others may only cover specific types of care. It’s important to choose a policy that provides the coverage you need, based on your individual circumstances and preferences.

    The cost of the policy is also an important consideration. Long-term care insurance can be expensive, and the cost of the policy will depend on a variety of factors, such as your age, health, and the level of coverage you choose. Shop around and compare policies from different insurance companies to find the best value for your money.

    Types of long-term Care Insurance Policies

    Long-term care insurance is a type of insurance that helps cover the costs of long-term care services, such as nursing home care or in-home care. There are different types of long-term care insurance policies available in Canada, each with its own benefits and drawbacks. Here are the two most common types:

    Traditional long-term Care Insurance

    Traditional long-term care insurance is the most common type of policy available in Canada. These policies provide coverage for nursing home and home care services. The premiums for these policies are generally lower than other types of policies. However, they require medical underwriting, and the premiums can increase over time.

    One of the benefits of traditional long-term care insurance is that it provides a lot of flexibility. You can choose the amount of coverage you need, and you can choose the length of time you want the coverage to last. This can be helpful if you have specific long-term care needs that you want to address.

    However, traditional long-term care insurance can be expensive, especially if you have pre-existing health conditions. Additionally, if you never end up needing long-term care, you may feel like you wasted money on the premiums.

    Disability Insurance You Can Convert to long-term Care Insurance

    Some disability insurance policies in Canada allow you to convert your policy to a long-term care insurance policy. While this a unique product, these types of policies do exist and may be worth considering.

    You can apply to convert your disability policy to a long-term care policy once you turn 65. You need to fulfill the criteria set out by the insurer to be approved. Some policies offer the options of a Return of Premium at Death and a Cost of Living option. The Cost of Living option helps your coverage keep up with inflation.

    A disability insurance policy you can convert to a long-term care policy offers significant income protection. The disability portion protects your income while you’re working by providing income if you cannot work. If you convert your policy to long-term care insurance, your policy will protect your income and assets by providing coverage for your cost of care.

    Government-funded long-term Care Programs

    Canada offers government-funded long-term care programs for eligible residents. These programs provide coverage for nursing home and home care services. However, these programs have limited coverage and may not cover all of the care you need. You may also have to wait for a long period to receive care due to the high demand.

    One of the benefits of government-funded long-term care programs is that they are generally affordable or free, depending on your income and eligibility. Additionally, these programs provide a safety net for those who cannot afford long-term care insurance or who do not qualify for private insurance.

    However, government-funded long-term care programs may not provide the level of care that you need, and you may have to wait a long time to receive care. Additionally, these programs may not cover all of the services you need, such as in-home care or specialized care for certain conditions.

    In Canada, provincial health insurance covers many of the costs of medical care. However, medications and special equipment such as wheelchairs, walkers or hearing aids are often not fully covered. If you’re in long-term care, the government may subsidize some of the costs of your care but not all of it. Paying for services such as meals, extra assistance, and laundry are usually the responsibility of the resident.

    Provincial governments recognize that some people may not be able to pay for the cost of long-term care. Each province and territory offers some assistance based on financial need as shown in the table below.

    ProvinceProgramEligibility
    AlbertaPartial or full coverage of long-term care costsResidents who are eligible for  Alberta Seniors Benefit or  Assured Income for the Severely Handicapped (AISH) program
    British ColumbiaTemporary Reduction of RateFor residents or the family of residents who would experience severe financial hardship if they had to pay the full cost of care
    ManitobaManitoba Health pays the majority of costs Residents pay the remainder of costs Manitoba health doesn’t cover. Fees are based on the resident’s net income and the net income of their spouse/partner
    New BrunswickFinancial assistance available through the Department of Social DevelopmentFor low income residents who cannot afford the full cost of care
    NewfoundlandFinancial subsidyEligibility determined by an income test
    Northwest TerritoriesIncome assistanceResidents who cannot afford care can apply to ECE Service Centres
    Nova ScotiaApply for Rate ReductionFor residents who cannot afford the full cost of care
    NunavutCosts for long-term care covered by the TerritoryMedical costs and residential long-term care costs paid for by the Territory of Nunavut for those who are eligible
    OntarioLong-term Care Rate Reduction ProgramHelps residents who cannot afford the co-pay
    Prince Edward IslandRate reduction programEligibility determined by an income assessment
    QuebecRate reduction programBased on your ability to pay established by the Formulaire 3657 – Application for Exemption or for Re-Evaluation
    SaskatchewanMinistry of Health pays approximately 80% of the costs of long-term careRemaining fees based on the net income of the resident or resident and spouse/partner
    YukonBased on eligibilityEligible residents pay $40 per day or $1217 per month

    Factors to Consider When Choosing a long-term Care Insurance Policy

    Long-term care insurance is an important investment in your future. It can provide you with the financial resources you need to pay for the care you require as you age. However, not all long-term care insurance policies are created equal. When choosing a policy, it is important to consider a variety of factors to ensure that you select the policy that best meets your needs.

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    Coverage Options

    When choosing a long-term care insurance policy, you must consider the coverage options available. You should choose a policy that provides coverage for the type of care you are likely to need. For example, if you prefer to receive care at home, choose a policy that provides coverage for home care services. If you prefer to receive care in a nursing home, choose a policy that provides coverage for nursing home care. Additionally, some policies may provide coverage for assisted living facilities, adult day care, or hospice care. Consider your preferences and choose a policy that meets your needs.

    Benefit Period

    The benefit period is the length of time that the policy will pay for your care. You should choose a policy with a benefit period that meets your needs. The longer the benefit period, the higher the premiums will be. However, a longer benefit period may be necessary if you have a family history of longevity or if you have a chronic health condition that may require long-term care. On the other hand, if you are in good health and have a family history of shorter lifespans, a shorter benefit period may be sufficient.

    Inflation Protection

    Inflation protection is an important factor to consider when choosing a long-term care insurance policy. This protection ensures that your benefits keep pace with inflation over time. Without inflation protection, the value of your benefits may decrease over time. There are two types of inflation protection: automatic and optional. Automatic inflation protection adjusts your benefits annually to keep up with inflation. Optional inflation protection allows you to purchase additional coverage each year to keep up with inflation. Consider your budget and your long-term financial goals when choosing an inflation protection option.

    Elimination Period

    Elimination period refers to the time between when you begin receiving care and when your policy pays for your care. You should choose a policy with an elimination period that you can afford. A longer elimination period will result in lower premiums. However, a longer elimination period may also mean that you will need to pay for your care out of pocket for a longer period of time. Consider your financial resources and your ability to pay for care out of pocket when choosing an elimination period.

    Premium Rates

    Premium rates are an important factor to consider when choosing a long-term care insurance policy. You should choose a policy with premium rates that you can afford. Premium rates can vary widely based on factors such as age, health, and coverage options. Consider your budget and your long-term financial goals when choosing a policy.

    Choosing a long-term care insurance policy can be a complex process. However, by considering these factors and working with a knowledgeable insurance professional, you can choose a policy that provides you with the financial security and peace of mind you need as you age.

    Costs of long-term Care Insurance in Canada

    Long-term care insurance is an important investment for Canadians who want to ensure that they are financially prepared for the cost of long-term care. The premiums for long-term care insurance in Canada vary based on several factors, including your age, health, coverage options, and benefit period.

    To get an accurate price for long-term care insurance in Canada, you can use an online comparison tool. It will take into account your age, gender, whether or not you’re a smoker, the amount of coverage you want and any add-ons. As an example, a 45 year old male might pay $77 per month for a weekly benefit of $500 with no option for inflation, while a 45 year old female might pay $108 per month for a weekly benefit of $750 with no option for inflation.

    Factors Affecting Premium Costs

    Your age is one of the most significant factors affecting the cost of long-term care insurance. The younger you are when you purchase a policy, the lower the premiums will be. This is because younger people are generally healthier and less likely to require long-term care in the near future.

    Your health is also an important consideration when it comes to the cost of long-term care insurance. If you are in good health, you may qualify for lower premiums. On the other hand, if you have pre-existing health conditions, you may be charged higher premiums or even be denied coverage altogether.

    The coverage options you choose will also impact the cost of your long-term care insurance premiums. Additional coverage options, such as coverage for home care or assisted living, will result in higher premiums.

    Finally, the benefit period you choose will also affect the cost of your premiums. A longer benefit period will result in higher premiums.

    Ways to Save on long-term Care Insurance

    While long-term care insurance can be expensive, there are several ways to save on premiums. One way to save is by purchasing a policy when you are young and healthy. This will result in lower premiums and ensure that you are covered in the event that you require long-term care in the future.

    Another way to save on long-term care insurance is by choosing a policy with a shorter benefit period. While this will result in lower premiums, it is important to ensure that the benefit period is long enough to cover your needs.

    You can also save on long-term care insurance by choosing a policy with a longer elimination period. The elimination period is the amount of time you must wait before your benefits begin. Choosing a longer elimination period will result in lower premiums.

    Finally, choosing a policy with a lower daily benefit amount can also result in lower premiums. However, it is important to ensure that the daily benefit amount is sufficient to cover the cost of long-term care.

    How to Apply for long-term Care Insurance

    Assessing Your Needs

    Before applying for long-term care insurance, you should assess your needs and determine the type and amount of coverage that you need. Consider your age, health, family history, and financial situation.

    Comparing Insurance Providers

    When selecting an insurance provider, it’s important to compare their long term care and disability insurance policies attentively and make sure they offer the coverage you need. Consider their financial stability and reputation as well.

    The Application Process

    The application process for long-term care insurance involves completing an application, providing personal and medical information, and undergoing a medical exam. Once you have been approved for coverage, you will receive a policy and begin paying premiums.

    Long-Term Care Insurance Claims

    When to File a Claim

    You can file a long-term care insurance claim when you become unable to perform two or more activities of daily living, such as bathing, dressing, grooming, and eating. You may also file a claim if you require supervision due to a cognitive impairment.

    The Claims Process

    The claims process for long-term care insurance involves completing a claim form and providing documentation of your care needs. The insurance company will review your claim and determine if you meet the conditions of your policy.

    Tips for a Successful Claim

    To ensure a successful claim, you should keep detailed records of your care needs, including receipts and invoices. You should also consult with your healthcare provider to ensure that you are receiving the appropriate care.

    Alternatives to Long-Term Care Insurance

    Personal Savings and Investments

    You can save for long-term care expenses by setting aside money in a separate account or investment. This can be a good option if you are unable to qualify for long-term care insurance or if you prefer not to purchase a policy.

    If you have a whole or universal life insurance policy with a cash surrender value, you may be able to withdraw the cash value or borrow against it to help fund your long-term care. These policies also have a death benefit if you pass away.

    Family Support

    Family support can be an alternative to long-term care insurance. If you have family members who are willing and able to provide care for you, you may be able to avoid the high costs of long-term care. However, this may not be a feasible option for everyone.

    Long-Term Disability Insurance

    Long-term disability is an insurance policy that protects your income if you can’t work. Typically, it replaces 60-85% of your income. If you are disabled, you usually have to exhaust your other sources of income support before you qualify for payments from long-term disability. Other income supports can include short-term disability insurance and Employment Insurance.

    The amount of your premium, the types of illnesses or injuries that qualify for long-term disability and the length of time you can collect long-term disability payments will vary between plans. Be sure to read your policy carefully to understand your benefits.

    Some employers offer long-term disability as part of their benefits package. You can purchase a policy through insurance companies and banks. Comparing features and prices will help you get the best policy for your circumstances.

    Some long-term disability policies offer the option to convert the policy to a long-term care insurance policy once you turn 65. Having this option can be beneficial if you want disability insurance and long-term care insurance but don’t feel you need them at the same time.

    Long-term care insurance doesn’t protect your income. Instead, it will reimburse you for the costs you have when in care or it will pay a weekly benefit. To receive benefits from a long-term care insurance policy, you must be unable to perform at least two tasks that are found on a basic list of six tasks. Some examples are that you are unable to dress yourself or bathe yourself.

    Government Assistance Programs

    Canada offers government-funded long-term care programs for eligible residents. These programs provide coverage for nursing home and home care services. However, these programs have limited coverage and may not cover all of the care you need. You may also have to wait for a long period to receive care due to the high demand.

    Long-Term Care Insurance in Canada: The Bottom Line

    Long-term care insurance is an essential part of your financial planning, providing coverage for the care that you may need in case you are unable to care for yourself due to a chronic illness, disability, or other conditions. Understanding the types of policies available, how they work, and how to choose the right one for your needs is crucial. By following the tips and information in this guide, you can make an informed decision about long-term care insurance in Canada.

    FAQs About long-term Care Insurance in Canada

    Are long-term care insurance premiums tax deductible in Canada?

    In most cases, they are not tax deductible in Canada. If your long-term care insurance is income style and you are not self-employed, you cannot deduct your premiums. If the policy reimburses you for expenses and you are self-employed, you may be able to deduct your premium. It’s best to get advice from a tax expert.

    Who should purchase long-term care insurance?

    Long-term care insurance can be a valuable addition to your financial portfolio. It can be a good option for people who are expecting to have a long retirement and may outlive their savings. These policies can also help keep your assets for your beneficiaries so you don’t have to spend your money on care. Finally, if you feel you won’t have enough income in retirement to afford a good long-term care home, long-term care insurance can provide the funds you need for the facility of your choice.

    Is long-term care insurance worth it?

    Whether long-term care is worth it depends on your circumstances. If you can afford the premiums and you feel that it can provide value in your later years, then it could be worth it. 

    How much does long-term care insurance cost?

    Premiums will vary depending on your age, gender, health and the amount of your policy. To get an accurate quote, it’s best to use an online tool. These tools will compare premiums from a number of companies so you can choose the best plan for you.

    Can you get long-term care insurance at 80 years old?

    You can purchase long-term care insurance up to the age of 80.

    What is the difference between long-term disability insurance and long-term care insurance?

    Long-term disability insurance is a type of policy that protects your income if you can’t work. Typically, it replaces 60-85% of your income. Long-term care insurance doesn’t protect your income. Instead, it will reimburse you for the costs you have when in care or it will pay a weekly benefit. To receive benefits from a long-term care insurance policy, you must be unable to perform at least two tasks that are found on a basic list of six tasks. Some examples are that you are unable to dress yourself or bathe yourself.

    Compare Disability Insurance in Canada
    Compare Disability Insurance in Canada
    You could save thousands of dollars by comparing prices before you buy disability insurance policies

    Get multiple quotes for disability insurance in just a few minutes

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    About The Author: Arthur Dubois
    Passionate about personal finance and financial technology, Arthur Dubois is a writer and SEO specialist at Hardbacon. Since arriving in Canada, he has managed to build his credit score, which he monitors for free using Borrowell. Arthur invests in the stock market without paying any fees through the online broker Wealthsimple Trade and earns 2.5% interest on the money he keeps in his EQ Bank's Savings Plus Account. He pays for his online subscriptions using his prepaid KOHO credit card, and uses his BMO CashBack Mastercard for most of his in-store purchases. When he buys bitcoins, it’s with the BitBuy online platform. Of course it goes without saying that he uses the Hardbacon app so that he can manage all of his finances from one convenient place.

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