Risk Management
Life Insurance | Critical Illness | Long Term Care | Income Replacement
It is no longer possible to turn on the news without being reminded on a daily basis that the Canadian health care system is already in a state of crisis. Those who have family or friends on long-term care waiting lists know that the situation is becoming desperate. The shortage of long-term care beds is so severe hospital acute care beds, already in short supply, are occupied by those awaiting transfers to long term care facilities. In some cities, like Victoria, that wait can last from one to four years, depending on the facility.
With growing pressure from an ageing population, the system simply cannot handle the increasing burden. Consider this:
With an ageing population comes the increasing costs of geriatric medical care. Currently we are spending $3.9 billion each year on Alzheimer's and dementia. By 2031, the number of Canadians afflicted with some form of dementia will more than double, to 750,000.
Our medical system is already unable to deal with the overload, and we are seeing drastic cuts in funding for residential long-term care. This shift towards "less costly" community-based care has dramatically increased the demand for home care, but at the same time the average number of home care hours you might have received a few years ago has dropped from over 20 hours per week to just 2-4 hours per week!
Again, those of us who have elderly parents and friends might be forgiven for feeling somewhat cynical about the current debate surrounding two-tier medical services. When it comes to long- term care for our loved ones, it is readily apparent that a two-tier system is already well entrenched. In short, the services are available, if you can write the cheque.
So…what are the chances that you will need long term care? It's true, we are living longer - in fact, in 1996, life expectancy at age 65 was 18.4 years, 5 more than in 1941. But the other side of the coin is that of those 18 years, on average, 9 are relatively healthy, and the other years include 3 years each of slight, moderate, and severe disability. In fact, it is estimated that at least 40% of all people over 65 will need some form of long-term health care services.
Traditionally, we have counted on the government to provide for our medical needs, but when it comes to long-term care, you can expect the following from our medical system:
Unless you have medically trained family members, who are willing and able to drop everything and tend to you around the clock, you could find your retirement savings liquidated in a few short years if you elect to pay for private home care or facility care. Consider the following:
Fortunately, there is now available in Canada insurance to cover the ongoing expenses of long term care. Available in the United States for decades, this coverage has recently been made available in Canada. Those of us whose practices consist largely of seniors know that it is long overdue.
Long-term care insurance covers virtually all of the expenses of long-term care, either in your own home or in a facility, for periods ranging from a few years to lifetime coverage. If you are between the ages of 30 and 80, you can apply for coverage. Depending on the level of benefit you select, you can receive up to $300 per day - tax free!
