What is long-term care insurance?
Long-term care insurance provides the insured with a tax-free weekly benefit if assistance is needed with two of the six activities of daily living, namely dressing, toileting, bathing, eating, maintaining continence, and transfer (for example from a bed to a chair), although the exact list depends on each individual policy.
The coverage is designed to ease the burden on two generations: your children, who would have to set aside additional resources to care for you, as well as you, who might otherwise be forced to tap into your savings. Unlike life insurance, most long-term care plans typically do not offer a discount to non-smokers, nor do they distinguish between male and female applicants.
How to choose your long-term care insurance policy
Here’s what to consider when choosing this type of insurance policy:
1. Make sure you understand everything, including the exceptions in the policy regarding how and when you receive coverage.
2. Choose how much income you will need to pay for your long-term care and for how long. Your broker can help you estimate.
3. Find out about the clauses that interest you.
4. Compare the offers of insurers.
As far as sole proprietorships are concerned, you can purchase this type of insurance policy from Ontario Medical Association/Sun Life Insurance, Penncorp Insurance Company, Manulife, Desjardins, RBC Insurance, and Blue Cross. We’ll quickly take a look at a handful of them now.
The Ontario Medical Association (OMA) offers a long-term care insurance policy to clients and their family members ages 21-80. Actually, the policy is backed by Sun Life Financial. The cost is identical to Sun Life. The plan has a five-year rolling premium guarantee and offers a zero-elimination period for in-center care. The policy is receipt based and men receive cheaper premiums.
Penncorp Insurance’s One Step long-term care plan pays as soon as a customer has a disability, including cognitive impairment, allowing them to take advantage of the best possible coverage. This is the specialty of the policy in Canada. Penncorp’s One Step long-term care plan is open to applicants ages 30-70. However, there is no premium guarantee on the plan premium.
Manulife Financial is committed to simplicity. The applicant simply completes an application form and participates in an interview, by phone if she is under 70 and in person if she is over 70. If you are 71 or older, a physician may be contacted to verify additional medical information. As a general rule, Manulife almost never requires laboratory tests as part of its long-term care application process. The policy is not receipt based and has a 90 day elimination period.
At Desjardins, the rates are a bit more expensive than the competition. You may use the funds however you wish and you are not required to provide any receipt. Premiums are guaranteed for the first five years and favor men.
As you can see, the offer is quite large and therefore it can be difficult to keep track of all the products. Therefore, I highly recommend working with an experienced life insurance broker who is well versed in this area of expertise.
