When my generation was young, I believed the only insurance that people cared about was life insurance. Men (mostly) wanted to make sure their families could manage financially upon their death and so they took out life insurance. It was a time when being a homemaker was not seen in a dollar value and as most women had not yet entered the work force, the need to insure “the little woman” wasn’t a priority.
Since then, the world has changed. Replacing the tasks of a stay at home mom by hired help is exorbitant, and so those wives and mothers that work either in the home or outside, often take out the life insurance offered through their work place or privately, right along with their husbands. Living longer and having more complicated life styles has given way to the need for many and varied types of insurance that we look to for protection in the event of crisis, such as Disability insurance, Critical Care Insurance and Long Term Care (LTC) Insurance. As this series of articles deal specifically with LTC Insurance, I’d like to go into some factors about why it is important.
No one plans to get ill, or have an accident that makes us dependent on others for our daily life needs. Yet one in 13 people over the age of 65 suffer from Alzheimer’s or related dementia. Half of those live in institutions. The risk of stroke doubles every 10 years after age 55, and almost one third of the elderly fall each year. Falls account for 40 percent of admissions to nursing homes.* And it is not just seniors who are at risk of needing help. The average age for a person to be diagnoses with Multiple Sclerosis is 30. Almost all spinal cord injuries (97 percent) occur prior to age 50.** All of these, along with so many other diseases we hear about, as almost common place today, may make getting out of bed, getting washed and getting dressed independently virtually impossible.
When people become ill, their financial expenses rise. There is the need for equipment, whether rented or bought, medication, help with personal care, travel for treatment, the need to hire someone to do the tasks that you used to do like snow removal, grass cutting, home repairs, child care etc. This can very quickly eat up any savings, investments or assets you have worked so hard to provide your family with. It is terrible to watch what you have managed to put away for your old age, or for your grandchildren’s education or your children’s inheritance, disappear in a matter of months because of the care you suddenly need.
Providing care today could easily cost $500 a week, depending on your needs. Most of this is probably not covered by any other insurance you have. If you do not have the financial means to hire people to assist you, the job falls on your children. The emotional burden to both of you is vast. No adult I know wants to become dependent on their children for their basic needs. And for the children to find the time to provide the care you need may involve hiring childcare or lessening their own work hours, both adding to already existing financial and emotional burdens.
Today, insurance policies do not come in a “one size fits all” form. You can tailor make a policy, and the cost will be as varied as the coverage you desire. A LTC Policy can be made to cover facility care and or home care. It can begin immediately upon need or entail a waiting period. It can give you the money for your care or pay upon receiving receipts. It can last from a bit over a year to an unlimited period of time. It all depends on your needs and what you can afford.
It is difficult to determine your needs when you are healthy. That is why the more information on insurance you get the better off you are. Many well spouse groups have had speakers in on the topic of Long Term Care. It seems to be of particular concern to care givers who know first hand just how difficult it is to have to be the caregiver of someone who is ill. As a group, well spouses seem to want to make sure their children do not have to do for them what they have had to do for their spouses. But LTC Insurance is not for everyone and even if it is right for you, not everyone can afford it. It is a very individual decision. It needs to be discussed with your financial advisor or a competent, honest insurance broker.
Next week I’ll discuss some things to look for when choosing a LTC policy.
My thanks again to Terri Allister and Hettie Pfeiffer (firstname.lastname@example.org) for giving me their time and expertise on the subject of Long Term Care insurance.
*Alzheimer’s Society, Heart and Stroke Foundation, Health Canada News Release July 25, 2001.
**MS Society, Canadian Paraplegic Association.