Long-term care insurance is one of the most seldom purchased types of insurance in Canada. In fact, it is estimated that fewer than 25 percent of all Canadian advisors have ever sold a living benefits policy (critical illness insurance, long-term disability insurance, or long-term care insurance). But why is this essential type of coverage so widely ignored? Below, we'll explore four common reasons people put off purchasing long-term care insurance and explain why these reasons are misguided.
While it may seem counterintuitive, the best time to purchase long-term care insurance is when you are young and healthy. An accident or serious illness can strike at any time, leaving you in need of round-the-clock care. In fact, there is a five times greater risk of becoming ill before the age of 65 than dying. Another point to consider is that the younger you are, the lower your premiums will be. Purchasing long-term care insurance before taking on other financial responsibilities – such as purchasing your first home or having children – is a smart way to protect your future assets and family.
Many people assume that qualifying for long-term care insurance is difficult. The truth is, more than 75 percent of healthy applicants between the ages of 45 and 64 are approved for coverage. Above the age of 65, around 50 percent of individuals will be approved for coverage.
With the cost of medical care continuing to rise, many people assume that the cost of insurance will be too expensive. While it's true that medical costs have soared in recent decades, affording long-term care coverage is not impossible. There are many ways to reduce the cost of coverage, such as choosing a lower benefit amount, opting for fewer extras, and combining your coverage with that of your partner. Depending on your policy, you may even receive a reimbursement for any unused coverage.
Living benefits policies like critical illness insurance, long-term disability insurance, and long-term care insurance aren't widely advertised, so many people assume few insurers sell these plans. Working with an independent insurance advisor with expertise in living benefits policies is a good way to get more information about insurance companies who sell this type of coverage.
Even if you're young and healthy, long-term care coverage is important. Contact us for more information on how to include long-term care insurance in your financial planning.