Critical Illness and
Long Term Health Care
from Ralph Vandervoort
This type of protection started in South Africa by the famous heart surgeon Dr. Barnard. People were now surviving life-threatening illnesses such as heart attacks and cancer, but were financially devastated. More and more, companies are beginning to offer this type of protection. A forty-year-old earning $50,000 may purchase a $150,000 policy for approximately $120.00 month, depending upon gender and smoking status. Income tax return information is, unlike disability insurance, not required. This makes this suitable for homemakers, new businesses, or anyone else who is unable to show sufficient earned income. Tax Free lump sum benefits are usually paid if you survive 30 days after diagnosis of the covered condition.
Plans may be purchased for periods of either 10 years, to age 75, or to age 100. As the period becomes longer, the risk to the insurance company increases. The resulting premium therefore also increases! A Return Of Premium option (ROP) at maturity refunds premiums paid tax free if there is no claim. Clients sometimes compare this to a bank savings account, which pays no interest but returns all deposits at maturity.
Personal health and family history are important factors in obtaining this coverage. Certain types of illness have a strong hereditary aspect and you may be declined because of this.
Long Term Care (LTC) coverage provides a daily dollar amount to provide for home care or facility care for those who can no longer provide for themselves. Only a few companies currently provide this type of coverage to offset these significant costs, which are shared by the provincial and federal government, as well as the resident. A brief medical questionnaire and a telephone interview are conducted to screen applicants. The resident pays a standard rate in each province that is geared to income, not assets. In Ontario the monthly rate is $1,940.00 for a private room, $1,627 for semi-private, and $1,380 for a 'ward' bed (usually 4 to a room).
The average stay in a long-term care facility is two to three years. In Ontario a private room for three years will run $70,000.00. Nursing-home care is also available in many retirement homes; the price whatever the market can bear!
Private home care is expensive, it ranges from $12 to $30 an hour depending on whether you need a homemaker or a full fledged registered nurse. Both facility care and facility /home care are available up to age 80 and in an amount up to $200/day. If you want to either stay in your home as long as possible, or wish to spare a loved one this extra hardship, contact us.