“Long-term care insurance” is a specialized insurance product designed to cover the costs associated with long-term care services, which may become necessary due to aging, illness, disability, or other conditions. This type of insurance is particularly focused on supporting individuals who need assistance with activities of daily living (ADLs), which are essential tasks required for personal care. The standard ADLs include:
Bathing
The ability to clean oneself and perform grooming activities like shaving and brushing teeth.
Dressing
The ability to make appropriate clothing decisions and physically dress or undress oneself.
Eating
The ability to feed oneself, but not necessarily the capability to prepare food.
Transferring
The ability to move in and out of a bed, chair, or wheelchair.
Toileting
The ability to use the toilet, including getting on and off it and cleaning oneself.
Continence
The ability to control bladder and bowel functions.
Long-term care insurance covers services that are not typically paid for by health insurance plans, including personal care in various settings such as the individual’s home, or specialized facilities like assisted living centres. Coverage is activated, or “triggered,” when the insured is diagnosed with a cognitive impairment or is unable to perform a certain number of the aforementioned ADLs, as defined by the policy.
Key features of long-term care insurance also include:
Flexible benefits
Offering a range of benefit options, including daily or monthly benefit amounts and periods.
Inflation protection
Ensuring that benefits keep pace with the rising cost of care.
Waiting period
A specified time between a qualifying event and the start of benefit payments, during which the insured must cover their own care costs.
Premiums
Costs vary based on factors like age, health, benefits selected, and can increase over time according to the policy terms.
Standalone long-term care insurance is now offered by few insurers in Canada. Some critical illness insurance policies also include long-term care coverage. Depending on the policy, insured individuals may be able to either convert a portion of their critical illness coverage into long-term care insurance before reaching a specified age cutoff or benefit from a long-term care insurance feature that operates alongside their critical illness coverage.