Samantha is a 62-year-old key account manager for a national manufacturing company. Financially speaking, Samantha and her husband have been doing well. They have fairly good salaries that afford them a few personal luxuries and trips throughout the year. Recently, Samantha's husband George was diagnosed with Parkinson's disease. This news has Samantha worrying about the care George will need and the strain this will place on their modest savings account and her earnings.

Many take for granted the good health they are currently experiencing, failing to realize that their health may not always follow them into their senior years. Thanks to advancements in medical research and the availability of treatments, people are living longer. Yet, as one ages, his health begins to decline. People like George will often require homecare or 24-hour nursing care provided by a long-term care facility.

What seems to be emerging as a certainty is that our ageing population, at some point, will require long-term care. The question then is, when will we pay for this care – now, later or a combination of the two? We are faced with increasing government deficits that have resulted in big spending cuts to health care services. Add to this the fact that health care services are in shorter supply and treatment costs are on the rise. All this equates to growing uncertainty for the well-being of seniors and disabled people.

Without government assistance, many are questioning what other options are available. Long-term care insurance (LTCI) is a large piece of the puzzle. Generally, LTCI and insurance coverage should not be thought of in isolation but be considered as components of your overall financial and estate plan.

Why might you consider LTCI? By purchasing a policy, you not only accrue funds that would later cover long-term care costs but also preserve a portion of your money that can be put towards the cost of taxes payable on death, building an inheritance for your children and wealth preservation.

More specifically, if George had LTCIcoverage, his policy might cover his residency in a nursing home or in a retirement home. He might also have access to any of the following: home care, adult care, respite care, and hospice care. Additionally, under his LTCI, George may be covered, for activities of daily living and stand-by assistance. All of these, can be very costly and can quickly deplete through a person's and/or family's savings.

The average costs listed above were taken from a recent study done by RBC Insurance, entitled "Long-term Care in Ontario – 2010." These signify the financial burden that residency in a long-term care facility might have on an individual and their family members.

The figures stated above cover only basic care. If additional services and care are required, and they often are, the costs of these services are then added to those noted above.

In an illustration, Sun Life Financial provides coverage of $1,000 per week (plus inflation adjustments) and charges premiums of approximately $4,800 per year over a 20-year span for a 62-year-old male. For a female of the same age, the same policy is $7,900 a year. The insurance premiums are payable for the 20 years, so long as the insured person continues to meet their eligibility criteria. The premium payments stop once the benefits from the policy begin.

LTCI is a vast and complex area, where it is easy to make costly mistakes. Deciding on an insurance policy can be frustrating and confusing when handled alone. LTCI premiums differ from one insurance company to another, and it is important to note that each policy differs in coverage and costs, depending on the type of policy the insurer provides. Therefore, it is important to consult with a professional who will help you determine the policy that is best for you.

If you would like more information on LTCI or financial and estate planning, please contact the writer or another member of SuRE (Succession, Retirement and Estate Planning) Services Group. Contact information can be found on our website.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.