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Expert Advice: Long-term care insurance

Do you have a financial question that's keeping you up at night? Ever wished you could get a second, or third, opinion on what to do with your money? Here's your chance: Bankrate.ca hosts a monthly feature whereby you submit a question, and we ask industry experts to weigh in. The topics are up to you -- you ask the questions, and we'll get the answers.

Here's this month's question: "What is long-term care insurance and why is this something I should consider?"

There are many stages of life and many stages of retirement and chances are that at some point you're going to find yourself needing care that isn't covered by the government or a regular health insurance policy. Long-term care may include nursing care, rehab or therapy, personal care (to help with activities, such as dressing, bathing and eating), homemaking services (cleaning, laundry, meal prep) or having someone on hand for a few hours a week (or around the clock) to help when and where you need it. This type of care can be provided in your home, in the community at adult day centres, or at long-term care facilities.

We tend to think of this as something for elderly Canadians, but young people may also need this kind of care if, for instance, they develop a disease, such as multiple sclerosis, or are in an accident.

However, for the most part, those who require long-term care aren't necessarily "sick," but rather are unable to perform some of the basic activities of daily living, or ADLs -- this can include dressing, bathing and eating, as well as toileting, continence, transferring in and out of bed or a chair and walking.

It's estimated that about 40 per cent of Canadians over age 65 will require some form of long-term care (LTC) and insurance is one way to help manage the costs.

Patty Randall, author of "Let's Talk -- The Care Years" and a Vancouver-based expert, speaker, writer and advocate on care years planning in Canada
For Randall it comes down to smart planning and peace of mind: "I view it like I do any other insurance."

Chances are one in 1,200 your house will burn down and one in 240 you'll be in a car crash, and yet house and car insurance are viewed as essential. Randall feels the same way about long-term care insurance (LTCI): "I own it because chances are one-in-two I will use it."

She also points out that LTC is the single largest out-of-pocket cost for adults over 60 -- it comes down to protecting income, as well as one's family.

People are living longer; most of us can expect to spend one-third of our lives in our "second adulthood," from 60 to 90. Randall stresses that aging isn't something to see as a negative, but rather another stage of life that we have to plan for and LTC insurance helps ensure that we get the most out of our senior years.

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-- Posted November 30, 2012
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