Minimizing the Financial Effects of Long Term Care or Spiralling Health Care Expenses
by Ross Valliant, CFP, EPC

Astute people strive toward their financial freedom by making tax smart investments. They use a portion of these investments to produce a return for use as an incomeduring retirement. Often, people want to prudently pass on their residual wealth to their family or charity at or before their death. However, the greatest fear of the elderly, no matter what their financial status may be, is runnng out of money.

Long Term Care

People today are living longer than ever before. We are taking better care of ourselves by adopting better eating habits and have a beter attitude towards exercise. With medicine's advancements people are more likely to survive conditions that in the past would have led to their death. Chronic disease like Alzheimer's, Parkinson's, cancer, stroke and lung disease are now diabling rather than terminal illnesses.

Goverment plans may cover only a portion of the care, assistance and supervision one may need. As well, their terms and conditions generally fall short of most people's parameters.

Private nursing home expenses can be in excess of $3,000 per month; government nursing homes are generally less costly but have long waiting lists.

In the majority of cases a family cannot provide sufficient care for someone who really requires even a slightly elevated level of care. Further, most people don't want to be a burden on their family.

A Long Term care contract provides choice; it providesthe financesfor the service and support required to maintain your day to day objectives should a chronic illnes or cognitive impairment keep you from looking after yourself.

Long-term care provides for services in a setting other than an acute care unit of a hospital. It generally includes long term facility care, respite care, hospice care, the rental of durable medical equipment and the rental of an emergency response system.

It is unpleasant to consider the possibility of long term care in your future, however, the following statistics illustrate the need to protect yourself and your wealth.

• 12% of Canada's population is over 65, that will increase to 25% by 2036
• The over age 80 will double in the next 20 years, triple in the next 40
• Over 250,000 Canadians presently suffer with dementia, that number will increase to 592,000 by 2021. The prevalence of demetia rises dramatically with age.
• The incidence of cancer, heart attack, stroke and arthritis patients is increasing each year.

Health Care

Many people in Canada are enrolled in a group or association healh care and extended coverage plan. These plans vary dramaticallyas to the protection and the cost of that protection. For those not enrolled in the aforementioned plans or who want particular coverage not availale in those plans or covered by OHIP, and who want to insure against unforseen large expenses, there are personal health care plans.

In most instances the choces available include a few basic packages with numerous options, so that each person, within parameters, has the ability to design their own package. As in any insurance contract conditions such as exemptions, maximums and waiting periods are generally in effect. It is only astute to understand your chosen plan.

Risk financing is a major element in managing financial risk; it serves to mitigate a major financial loss. Nearly 100% of people have an enhanced peace of mind knowing that their financial affairs are in fact in order.