Long-term care insurance & home care assistance plans in Canada

Long-term care insurance helps cover the costs of long-term care services for individuals who can't perform basic activities of daily living due to aging, chronic illness, disability, or cognitive impairments (e.g. dementia). As a type of life insurance living benefit, long-term care coverage can protect you financially during your lifetime while also providing peace of mind.

While many Canadians believe that long-term care costs are covered by the government, this is actually a big misconception. The public health system may provide funds for some types of care (e.g. nursing care), but not everything is covered. It's also important to remember that any additional medical coverage you may have from your employer's group benefits insurance will be gone once you're no longer employed.

According to the Canadian Life & Health Insurance Association (CLHIA), the cost of long-term care for baby boomers across the country will amount to $1.2 trillion within the next 35 years – and only half of this will be covered by the government. Plus, by 2036, one-quarter of the population will be over 65 years old while an expected 1 million Canadians will be afflicted with dementia.

Many individuals or families will then be left to pay for these necessary expenses out-of-pocket which can become a huge financial burden. The CLHIA also found that nearly three-quarters of the population (74%) have no financial plan for long-term care expenses if needed. This is where insurance comes in – a long-term care policy can be worth it for many Canadians who are seeking protection (as well as peace of mind) from unforeseen situations.

On top of that, another common misconception is that long-term care insurance should only be sought out by the aging population. While these policies can be tailored for the elderly – as common coverages include assisted living facilities and in-home nursing care – and are great additions to any senior life insurance policy, they aren't just limited to this group. Younger Canadians can also face unexpected illnesses or disabilities (such as from a motor vehicle accident) which can require around-the-clock care.

Below, we cover a few pros of long-term care insurance, plus the cons of relying on government benefits in Canada. Seeking an individual coverage plan allows you to have more control over your care, with more flexible options. 

Long-term care insurance typically comes in two forms: a reimbursement plan or an income-style plan. Here, we cover the main differences between the two, so you can select the right one for yourself:

Long-term care insurance can cover all different expenses associated with chronic illness, disability, or other conditions that require ongoing care. Here are a few examples of costs a policy can help pay for:

There are many factors insurers look at to calculate your personal long-term care insurance quote. Generally speaking, the more risk you bring as a policyholder, the more expensive your coverage will be. Here, we cover a few main factors you should be aware of:

The amount of coverage you should opt for on your policy will depend on your own needs (as well as your own current and expected financial situation). If you have a significant amount of savings, for instance, you may need a lower long-term care insurance benefit.

Also, be sure to consider the expected cost of care in the area you're located in. Below is a table outlining the average costs of long-term care facilities in Canada by province, as well as the average costs of private home care in Canada by province. All numbers were sourced from the Canadian Life & Health Insurance Association and LifeStageCare.

The CLHIA states that assisted living facilities can cost anywhere from $900 to $5,000 or more each month, depending on room selection and government funding. Meanwhile, home care can cost between $12 to $90 each hour for services like homemaking, personal care, and nursing care.

In a hypothetical scenario, an individual requiring assisted living care at a rate of $3,000 per month would spend $36,000 over the course of a year. In contrast, someone who chooses 5 hours of at-home care, 5 days a week, at a rate of $35 per hour, would spend $39,000 annually.

Be sure to account for different scenarios when considering your potential long-term care needs. Additionally, it's essential to consult with a licensed insurance broker or financial planner to assess your personal situation to make the most informed decisions about your coverage needs.

While long-term care insurance, critical illness insurance, and disability insurance are all forms of living benefits, each one serves a different purpose when it comes to your financial protection. In the table below, we summarize the key features of each product: