We take everyday activities like getting out of bed, going to the washroom and getting dressed for granted. But we’re all vulnerable to accidents and illnesses that can change the way we live.

Long term care services are provided to individuals who are unable to care for themselves, for example as a result of accident, illness or deteriorated mental abilities.

Long term care insurance helps cover the costs of long term care services.

The costs of long term care services

Government programs provide some long term care services, but individuals must often pay for much of their care out of pocket. Consider the following:

• Accommodation in a long term care facility can cost from $800 to
  over $5,000 per month depending on the room type and the level
  of government funding available in your province.
  
   
• Private home care service costs* range from $12 to $22 an hour for
  homemaking and personal care to between $18 and $60 an hour for
  nursing care.
  
   
• More than one-third of Canadians aged 45 - 64 who provided informal
  care to a family member or friend incurred extra expenses as a result
  of their caregiving duties.**

Long term care services can include:

• nursing care
• rehabilitation and therapy
• personal care (help with activities of daily living like dressing, eating and bathing)
• homemaking services (meal preparation, cleaning, laundry)
• supervision by another person

Care may be provided in the home, in the community (e.g. adult day care) or in a facility that provides long term care.

* Home care service costs vary widely by location, even within provinces. The costs listed above were compiled by Sun Life Financial, 2004.
** Source: Statistics Canada, 2002 General Social Survey, Cycle 16: Aging and Social Support - Tables

The plan and plan features

Long Term Care Insurance provides an income when you require care. You don’t have to prove you incurred any eligible expenses. The income can allow you to pay for whatever long term care services you wish - you could even choose to pay a family member or friend to help with your care.

Needing long term care shouldn't leave you without choices.  Before you need care, ask yourself:

• what quality of care you want
• where you want to receive care - for example your own home, a retirement home, a facility
• how your family will cope, financially and emotionally, with care giving
• whether you really want to use your savings and investments for care

Long Term Care Insurance offers you flexibility to make your own choices.

Choose the benefit type	comprehensive benefit facility care both comprehensive benefit and facility care
Decide on the dollar amount of your weekly benefit	The minimum weekly benefit is $150 The maximum weekly benefit is $2000 for each benefit or combined if you apply for both benefits
Choose how long the benefit will last	100 weeks (1.9 years)  150 weeks (2.8 years) 250 weeks (4.8 years) unlimited Benefit periods can be different for each benefit type.
Select the waiting period	The waiting period refers to the number of calendar days you must wait, after you qualify for a claim, before benefits are payable. Comprehensive benefit: 30 calendar days 90 calendar days Facility care benefit: 0 calendar days (only available if you choose both benefit types) 30 calendar days 90 calendar days Waiting periods can be different for each benefit type.

Benefit type descriptions:

Comprehensive: Comprehensive income benefits are payable if you are physically dependent for longer than the applicable waiting period. Physical dependency* means that you require assistance from another person to perform 2 or more of the 6 activities of daily living (bathing, dressing, feeding, toileting, transferring, continence), or you require continual supervision because of deteriorated mental ability.*

Included with the comprehensive benefit, you are entitled to one free plan of care while the policy is in effect. This is a care plan for your personal situation that outlines the types and amounts of care you’ll need, explains how care can be provided, and includes what you may be eligible to receive from government programs.

Facility care: This income benefit is triggered if you are physically dependent and are receiving facility care* for longer than the applicable waiting period.

You might consider purchasing the facility care benefit if you believe you are more likely to reside in a long term care facility than in another setting (your own home, a retirement home) when you need care. The facility care benefit can give you extra income to allow you more options, such as choosing a private room or, depending on your province’s funding arrangements, better ensuring a spouse’s income and assets are not impacted if you must move into a facility.

Comprehensive benefit and facility care: You might consider purchasing facility care coverage in addition to comprehensive coverage if facility care costs in your province are significantly higher than your expected care costs if you don’t move into a facility. If you choose to apply for both the comprehensive benefit and facility care, facility care benefits may be paid in addition to comprehensive benefits if you are both physically dependent and receiving facility care.

In all cases, benefits are paid out as income. How you spend this income is up to you.

*Assumes you are both the owner of the policy and the insured.

The coverage options

Two optional benefits are available:

Inflation protection benefit: You may choose to protect your benefit against inflation by selecting one of the following options:

Option A:

• weekly benefit increases by 3% on each policy anniversary while benefits are payable

Option B:

• weekly benefit increases by 3% on each policy anniversary while benefits are payable
• weekly benefit increases by 2% on each policy anniversary while no benefits are payable

Return of premium on death (ROPD) benefit: The return of premium on death benefit returns a portion of your premiums to your estate if you die while the policy is in effect.

The premiums

Paying your premiums: If you wish, you can choose to limit how long
premiums are payable. Premiums are higher if you choose this option,
which limits payment to the longer of 20 years or to age 55.

You can pay premiums annually by cheque or monthly by pre-authorized chequing. If you pay monthly, premiums are slightly higher. To calculate monthly premiums, we multiply the total annual premium by .09.

Premium guarantee: Premiums are guaranteed not to change for 5
years from when the policy is issued. After that 5-year period, premiums may increase but we will not increase them again for at least another 5 years.

Premium increases are based on your age at the time the policy was issued. Your health or ability to function independently at the time of the premium change will not be considered in determining the new premium.

Waiver of premium benefit: Premiums do not have to be paid (are waived):

• while you are receiving comprehensive or facility care benefits
   
• if we’ve paid you the total number of weeks in your benefit period for either the comprehensive or facility care benefit, but we haven’t paid the total number of weeks in your benefit period for the remaining benefit

Premiums are not waived during your waiting period.

Spousal waiver of premium benefit: This benefit may apply if your spouse is also insured under a long term care insurance policy we issued.

Withdrawable premium fund: Any excess premiums you pay will be placed in a premium fund, which earns interest similar to a bank account. Interest is tax-reportable (using a T5 slip). If a premium is not paid, we will take it from this fund if there is enough money in it. Withdrawals made from the fund may be subject to a fee and a minimum withdrawal amount.

Extended term insurance provision: If you fail to pay a premium, and there is not enough money in the premium fund to pay that premium, your coverage may continue for a limited time depending on:

• base benefit type (comprehensive or facility care)
• age when you purchased
• sex
• premium payment period, and how long you’ve had the policy

While extended term insurance is in effect:

• no return of premium on death benefit is payable
• no inflation protection increases are made

The information you provide with your application will determine the features available to you. Your policy will contain complete details of the terms and conditions of coverage, as well as important exclusions and restrictions. 

The cost

The cost of long term care insurance varies depending on the benefit type you choose, and the benefit amount and coverage options you select. Your age, health and other medical and lifestyle factors are also used to determine your premiums.

A Long Term Care Insurance Specialist can help

It’s important to have a realistic expectation of what your needs may be if faced with a condition that makes it impossible for you to care for yourself. A Long Term Care Insurance Specialist can offer you a clear understanding of long term care issues, costs in your area, and coverage available. Together, you can develop a customized plan that will ensure your future is protected.  Contact your advisor for more information.