Concerned about the cost of your health care during retirement? According to Munich Reinsurance, 50% of men and 63% of women age 65 will require some type of long term care assistance during their lifetime.
Long term care insurance protects you against medical illnesses and the financial impact that prolonged medical attention may have on your ability to conduct your daily activities and the associated financial consequences.
In the event of a cognitive impairment or the inability to complete two or more activities of daily living, long term care insurance provides up to $9,000 per month for care in your own home (home care) or in a facility.
As a Physician, you are acutely aware that you cannot foresee a potential health problem and the associated cost of care. This is why there is long term care insurance for physicians.
What is a long term care facility?
A long term care facility is a licensed convalescent nursing facility or hospital, a convalescent unit of a hospital, an intermediate care facility or a custodial care facility. It may also be a facility used primarily for rest care or social care for the aged (retirement homes, homes for the aged, lodges, etc.) where continuous nursing services are administered under the supervision of a physician or registered nurse.
What is the cost of public v private long term care facility?
The government funds the majority of the cost of “public” facility/institutional care with an individual paying up to a maximum of $1,400 per month (this is a public facility only). Most Physicians want a higher level of care and choose to go to a private facility where there are higher staffing levels, interactive activities, and an overall more positive living environment which prolongs life. A private long term care facility costs up to $8000/month.
Does the government cover the cost of long term care?
NO. The government covers up to a daily maximum of 2 hours or $60 per day (the current Ontario daily maximum) for home care. Home care costs are approximately $50 per hour for a registered nurse or $20 per hour for a non-medical care giver.
Most people want the freedom to make their own choices about their health care needs with the desire to maintain their independence so that they are not a burden on their spouse/family in the future.
I have enough assets, why do I need long term care insurance?
You have life insurance to pay off your estate tax. You had disability insurance to protect your income while you worked.
Long term care insurance protects the investments you built up over your lifetime, it insures you get the proper level of care if required and protects your investments.
- The cost for long term care is on average $6,000 per month and the average claim we have is for 5 years. If you need care, that is $360,000 (72,000 per year * 5 years).
- The cost for long term care insurance for a 60 year old male for for $4800/month is $4,180 per year for 20 years and coverage is for life.
- So would you rather lose $360,000 of your investments or invest $83,600 over 20 years to protect them?
- Lets assume you have $2M in investments earning a 5% rate of return, the return will more than pay for the insurance cost.
Elliott Levine is the President of Levine Financial Group in Toronto
416-222-1311 I email@example.com