Long-term care insurance may soon be pulled out of Canada
Old age is irreversible along with the diseases and ailments that are associated with it. Advance in science and medicine has given a long life to the population but keeping oneself fit is a different story.
Many old people come to a point that they are unable to take care of themselves. They have to hire somebody to look after them and that can also be for longer periods. It may come as a respite that people can sign up for long-term care insurance which takes care of some of the financial burden. But that too may be lost out very soon!
It appears that long-term insurance is not that popular in Canada and the people don’t have a clear idea of the benefits. Still those who want to apply for it may not find any provider in the recent future.
Manulife Financial, one of the leading insurance companies have announced that they are going to discontinue the long-term care insurance come November 2017. According to company sources, the product does not have much demand in the market. Also, the recent federal laws are responsible for the move because they don’t allow the insurance provider to access medical reports.
The new Genetic Non-Discrimination Act states that insurers cannot demand genetic tests or their results to determine the eligibility for a product or service. The information is often required by the insurance providers to calculate the risks and accordingly, the premium amount. Not having such information will only make long-term care insurance more expensive than they already are. The premium amount increases with age and complexities and many people wait till old age to apply for it. This makes the cost excessively high and as a consequence many people turn away from it.
People also don’t realize the importance of long-term care insurance as the matter can arise years and decades later. Generally life insurance sells the most while disability and critical illness coverage are also common.
Long-term care automatically initiates when a person is unable to perform daily activities like bathing, eating, dressing, toileting and so on by themselves. The insuring company hands over tax free benefits which is spent as the patient pleases. Generally long-term care costs can range from $1,000 to $5,000 per month. With the discontinuation of individual insurance policies, the only way to get long-term care insurance would be to look for bundles that offer it with critical illness or disability policies.
There is an increased need for awareness about the specific type of insurance. 350,000 Canadians paid $116 million as premium for long-term care insurance in 2015. The policies are quite recent in the history of Canada being introduced for 20 years only, according to Conference for Advanced Life Underwriting (CALU). It would be a great misfortune if insurers stop the service as the matter is quite serious. CALU had even appealed to the government to let people borrow money from their retirement accounts to manage their long-term insurance premiums. There is a need to look after the interests of the aging population and also the profitability of the insurance companies at the same time.