Long Term Care Insurance PlansLong Term Care Insurance Plans come in three key forms in Canada. There are income plans, reimbursement plans, and indemnity plans. All of them are promoted by insurers as a solution for the expenses that will occur when long term care is required due to aging or in some cases an illness or injury. The LTC Insurance plans pay a benefit after the insured is unable to perform certain activities of daily living or has a cognitive impairment such as Alzheimer’s. How a benefit is paid depends on the type of policy selected at time of purchase. This makes a critical difference years after purchase when the benefit is needed. So which of the three are best? Take a look at each … Income plans In the income model of Long Term Care Insurance a monthly benefit commences after meeting the definition of requiring long term care. The date of commencement depends on the elimination period in the policy. Elimination Period is a set amount of time after diagnosis for benefits to start. This is usually elected at time of purchase with 90 days being the most common elimination period. The key advantage of the income model is that the income comes with no strings attached with respect to how it is used. This type of policy is usually the most expensive. Reimbursement After qualifying for a benefit and satisfying any elimination period the insured can receive reimbursement for covered expenses up to a daily or monthly maximum. It is obvious that this is more restrictive than the income model. Indemnity Just like the income and reimbursement models the insured must qualify based on their ability to perform certain activities and must wait through the elimination period. After this the insured must prove that a covered expense was incurred and the insurer will reimburse a pre-determined daily amount. Often the indemnity and reimbursement models have restrictions as to what types of care are provided (i.e. must be in a nursing home or long term care facility). An insured wishing to stay in their home may only be eligible for a benefit under the income model. The income plan is the least restrictive. Not all Canadian LTC Insurance Companies offer it. Back to Long Term Care Insurance Canada
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