Skip to main content

Financing Long-Term Care: Exploring Your Options

Navigating the decision to transition yourself or a loved one into long-term care can be challenging. Determining how to finance long-term care only adds more complexity to an already emotionally charged situation. By understanding potential costs and proactively planning for them, you can alleviate some of the stress that comes with this significant life change.

Understanding Long-Term Care

Long-term care is a broad term encompassing various support services designed to assist seniors in their daily activities. According to the Canadian Institute for Health Information, these activities could include bathing, dressing, eating, and mobility tasks, among others.

The level of care required is highly individualized, with solutions ranging from home health care and transportation services to housekeeping and senior companion services.

The Cost of Long-Term Care

Long-term care costs can differ substantially based on individual health conditions, care requirements, and geographical location. As per the Canadian Life and Health Insurance Association, long-term care can range from around CAD$2,500 per month in a residential care facility to upwards of CAD$5,000 per month for a private room in a nursing home.

Given these potential costs, planning how to afford senior care is essential.

Financing Long-Term Care: What Are Your Options?

There are multiple approaches to offset or cover long-term care costs. Let’s explore a few of them.

Long-Term Care Insurance

Long-Term care insurance specifically aims to cover daily living service costs. However, eligibility for this type of policy typically requires the insured to be in relatively good health. The premiums can be high, and coverage is often limited to a few years. If the need for care outlasts the policy term, you could be left uncovered.

Personal Funds

Those with substantial personal wealth may have the option to pay for long-term care through their assets or cash reserves. This could mean tapping into savings accounts, stock portfolios, pensions, or property sales. However, personal assets might not be sufficient to cover all long-term care expenses.

Government Programs

In Canada, the healthcare system, which includes provincial and territorial programs, may provide some assistance with long-term care costs. However, these programs usually have restrictions and vary based on your location and eligibility criteria.

For Quebec residents:

  1. Public Long-Term Care Homes (CHSLDs): Quebec’s health insurance program covers the cost of care in public long-term care homes (Centre d’hébergement de soins de longue durée). However, there may be additional costs for private rooms or other optional services.
  2. Home Care Services: The Quebec Health Insurance Plan offers publicly funded home care services for those who qualify. These services can include nursing care, personal assistance, rehabilitation, and psychosocial support.
  3. Financial Assistance for Seniors: The Financial Assistance Program for Domestic Help Services provides financial assistance to seniors for housekeeping services. This program aims to help seniors remain in their homes for as long as possible.

Outside Quebec:

Remember that the programs available to you will depend on your province or territory of residence, your individual health situation, and your financial circumstances. Therefore, it’s crucial to research and understand the specific programs in your location and consult with healthcare professionals or social workers knowledgeable about your local resources.

  1. Alberta Seniors Benefit: This program provides monthly income supplements to federal income sources including Old Age Security and Guaranteed Income Supplement. The supplement amount depends on marital status, income, and living situation.
  2. Ontario’s Long-Term Care Home Wait List: Ontario residents with a valid health card who have high care needs may qualify for this program. It provides access to provincially subsidized long-term care homes.
  3. British Columbia’s Choice in Supports for Independent Living (CSIL): This self-directed option provides funding to eligible adults to manage their home support services. The program aims to give more flexibility and choice to individuals who are capable and willing to take on the responsibility of managing their home care.

Canadian Life Settlements

A compelling solution may lie in an asset you already own: your life insurance policy. Selling your policy, a process known as a life settlement, is an increasingly popular option for funding long-term care or offsetting associated costs.

If you’re 70 or older and have a life insurance policy worth CAD$100,000 or more, you may be eligible to sell your policy for a lump-sum cash payment through Canadian Life Settlements. Any type of policy, including term, may qualify.

Your eligibility and the amount you can earn from selling your policy depend on factors like age, health conditions, and policy type. You can quickly find out how much your life insurance policy is worth over the phone or online with Canadian Life Settlements.

Who Should Plan for Long-Term Care?

The possibility of requiring long-term care should be considered by all, as unexpected events can occur at any point. However, certain risk factors make it especially critical to plan for this potential outcome. Let’s consider these factors:

Age: The aging process often leads to a natural decline in health and ability to carry out daily tasks. As you age, the likelihood of needing some form of long-term care increases.

Gender: Women often find themselves requiring long-term care more frequently than men. This is largely due to their longer average lifespan, which increases the likelihood of outliving their spouse and dealing with age-related health issues.

Marital status: Single individuals are more likely to need support than those who are married. Without a partner to share caregiving responsibilities, the need for external support and care can become more pressing.

Lifestyle: Lifestyle choices, such as unhealthy diets and a lack of regular exercise, can hasten the deterioration of health and therefore increase the need for long-term care.

Health conditions and family history: If you have pre-existing conditions or illnesses, or a family history of certain diseases, these factors may worsen with age and increase the necessity for long-term care.

The expense of long-term care can be burdensome and even overwhelming for those who haven’t made prior arrangements. The costs can quickly escalate, and without a sound plan, the financial impact can be significant. By planning ahead, not only do you ensure your own care needs will be met, but you can also help to protect loved ones from having to bear the financial stress.

Are you considering a life settlement for your life insurance policy? Wondering if you’re eligible to sell your life insurance policy? Learn more about selling your policy and find out if you qualify for a life settlement by contacting the experts at Canadian Life Settlements today.

Sign up to our Newsletter

For news and updates about life settlements in Canada

    I would like to receive the Newsletter and email updates about Canadian Life Settlements developments from time to time. My email address is not to be shared or used for any other purpose.