A recent Ipsos Reid survey found the majority of Canadians are concerned with the availability of long-term care services in their senior years and how they are going to pay for those services – findings that should come as no surprise to insurers, says one financial advisor.
John Archer, a financial security advisor with RBC Wealth Management Financial Services Inc., in Montreal, Que., explains that people “might be downright terrified,” given the dramatic erosion of a client’s net worth when virtually any form of long-term care is required.
“All I can say, from my experience, is that if you plan to get old and in need of care, you’d better be rich, have complete faith in future government services or … be insured,” he wrote in a recent column in the Montreal Gazette.
Archer says that long-term care insurance is a relative newcomer to the living-benefits insurance landscape. “Unfortunately, it has not had the marketing that it should, given the results of this Ipsos Reid survey,” he writes. “However, it is readily available (for the medically insurable between the ages of 21 and 80) and at rates that generally make it accessible to most budgets.”
A selling point for brokers looking to tap into the rich Baby Boomer market of retirees looking to protect themselves from the high costs of long-term care.
A simple cost analysis of the premiums required versus the potential payback reveals that any premiums paid over 20 years would take less than two years to recoup once a person is on claim.
“Some plans even provide for a refund of the premiums, at death, if a claim is never paid,” says Archer. “Money in the bank, as it were.”
A strong argument for brokers is that long-term care insurance not only helps finance part — or the entire — expense of staying in a private or semi-private long-term care facility, but can also provide a steady stream of income for nursing care or registered caregivers when the treatment is given in your home.
“Make no mistake: Even care at home can have you quickly run up a tab,” he states in the Gazette column. “Sure, your son or daughter might become your caregivers (if they live in town), but even so, if they are trying to keep down a job or raise a family, having supplemental caregivers to relieve the stress may well be required.”
John Archer is a financial security adviser with RBC Wealth Management Financial Services Inc., a life insurance brokerage firm, in Montreal. He can be reached at 514-878-5040 or [email protected].