Long Term Care – a cost or an investment?

Death, taxes and ?? Some certainties in life to consider. I would like to suggest that the ?? in the opening statement should be long term care. And all Provincial and Territorial Health Ministries and Departments agree. Here is the link for BC. http://www2.gov.bc.ca/assets/gov/topic/ AE132538BBF7FAA2EF5129B860EFAA4E/pdf/active_aging_symposium_2011_ report.pdf

Going back for more than a decade, Provincial and Territorial Health services have been telling Canadians NOT to rely on government largesse for help with the cost of long term care – whether a voluntary or involuntary choice. While there are and will likely always be, some level of care available at government expense, people need to give serious consideration to the level and quality of care they would prefer for themselves. Depending on your physical, emotional or mental abilities, there are several choices available from completely independent living through to end-of-life care – all offering different levels and costs for your care.

While we might wish it otherwise, the government can never provide everything for everyone and becomes the provider of “last resort” when no other options exist – primarily a question of your financial resources at the time you either choose to use or have to use one of the available options.

I mentioned the last decade a few sentences back – and there has also been a new opportunity for people to take ownership of these financial costs that has also come about in the last 10 years. It is called Long Term Care Insurance. Originally available only people north of 45 or 50, it can now be purchased by individuals as young as 21 for very nominal annual deposits and the contract can be fully paid in as little as 20 years. So what does this do? It creates a pool of tax-free money against which you can draw to pay for covered in-home or facility-based expenses – you choose your options and the amount of money in your pool. Plans offer either a reimbursement option (you pay, send the insurance company the receipts and they pay you for the actual expenses incurred up to a daily maximum) or a flat benefit amount (where the insurance company sends you a cheque each month for your total allowable daily benefit multiplied by the number of days in the month and you can spend the money any way you choose).

You need to consult a professional financial planner or advisor who can explain the benefits available and the payment options – which are very flexible. If your planner is doing a thorough plan (which you should expect BTW) this is a critical piece of the puzzle for the post-employment part of your life. This is an investment in a safe, secure and independent life – it is not a cost in any sense of the word. And please remember, people in their 20s sometimes need long term care – brought about by either accident or serious illness – this need is not limited to mature Canadians!

Ian Whiting

Ian R. Whiting CD, CFP, CLU, CH.F.C., FLMI (FS), ACS, AIAA, AALU With more than 40-years of experience in the industry, Ian has qualified 3 times for MDRT, completed LUATC in 1979, the LUAC Financial Planning Skills Course and attended numerous Schools in Agency Management and Sales Management through LIMRA. He obtained his CLU in 1987 while also completed his IFIC qualification and completed his Fellowship in the Life Management Institute with a specialty in Financial Services in 1988. In 1989, he completed qualifications for his Chartered Financial Consultant designation. In 1992, he qualified as an Associate of the Academy of Life Underwriters (Head Office underwriter qualification) and in 1993 he completed his Associate, Customer Service designation program through LOMA. In 1997, he qualified as a CFP and also completed his courses and exams to obtain the Associate, Insurance Agency Administration designation. In 1999, he completed the study and examinations to qualify as a Trading Officer, Partner and Director for Mutual Funds with the BC Securities Commission. As a result, he is also qualified as both a Branch Compliance Manager and Head Office/Provincial Compliance Officer. He served for nearly 18 years with the Canadian Forces (Air) Reserve (reaching the rank of Captain) primarily working with Air Cadets and was award the Canadian Forces Decoration (CD) in 1982. Long known as a maverick and forward thinker in the financial services world, Ian enjoys the challenge of learning new material and planning for the future evolution of his chosen profession.