Going…Going…Gone? Is This Your Last Chance for Long-Term Care Insurance?
We’ve talked before about the importance of planning for health care costs in your senior years. Home care and long-term facility care can run into the thousands of dollars per month, quickly draining your retirement funds.
One of the ways you can protect yourself and mitigate some of these costs is through long-term care insurance (LTC). This has been a relatively new product on the market without as much history as life or disability insurance. We previously explained what it does in this blog post.
What’s New with Long-Term Care Insurance
LTC has been a great solution for many Canadians, but it’s slowly disappearing from the market. In the fall of 2017, Manulife Financial Corporation announced that it would no longer offer new LTC policies to clients. It accepted its last applications on November 30th. Manulife claimed there wasn’t enough market interest in the product (it can be expensive) and it is worried about new federal laws that limit insurers’ access to client medical information. In other words, the company believes the products won’t generate enough for their bottom line and might become a long-term liability.
It turns our Manulife isn’t the only insurer who thinks LTC insurance is a losing game. In December, Desjardins Insurance announced its plans to follow Manulife’s lead and exit the LTC industry. Desjardins announced it will accept its last applications for LTC on June 15, 2018. Both companies will still honour existing policies.
Desjardins does plan to keep limited access to LTC through some of its life insurance policies. It offers LTC Advance, which is a hybrid LTC and life insurance product. It’s mainly life insurance, but policyholders can access some of the benefit if a LTC situation should arise. However, this will reduce the life insurance death benefit paid out.
Who Is Left in the Market?
These two exits leave only one major player left in the market: SunLife. After June, you won’t be able to shop around for the best policy, as SunLife will be your only choice. There’s no guarantee that SunLife will even stay in the market. Based on recent events, it might also decide to go the way of Manulife and Desjardins and stop offering new policies.
What Does This Mean for You?
If you would like to get an LTC policy while you still have a choice between plans (or if you know someone who should give this type of protection serious consideration), now may be the time to at least give it a look. After that, you will have only one major Canadian insurer so, you will be at the mercy of SunLife and whatever premiums it decides to offer. (Choice usually gives you better rates, and better coverage.) Even though LTC may seem expensive, it is only a fraction of the true cost of draining your savings to look after someone in care, and it will likely only become more expensive in June once Desjardins closes the door on their LTC offering.
If you want to talk long-term care, let me know. We can discuss what it does and if it’s a good option for you and your upcoming retirement years.