There is a 50% probability that you will need some form of long term care (home care or facility care) in your lifetime.

A recent poll by Leger Marketing on behalf of the Canadian Life and Health Insurance Association (CLHIA), reported that 74 per cent of Canadians have no financial plan to pay for long-term care.

CLHIA estimates a cost of almost $1.2 trillion ($1,200,000,000,000) to provide long-term care to the baby boomer generation as they pass through old age (those baby boomers started turning 65 last year!)

Current government programs and funding will only cover about half of this.

That would leave a funding shortfall of $590 billion - which is roughly 95% of all the individual registered savings plans in Canada today. That doesn’t leave much in the personal till for a carefree retirement.

Governments cannot afford old people. That is not a political statement, it’s a math problem. Healthcare and social programs will be under the microscope and suffer cutbacks for the foreseeable future.

To complicate things further, people are living longer.  An article in the National Post last year predicted that 50% of babies born today will live to 104 and beyond.  There will be a lot more “life” than money for many people.

That’s why I bought Long Term Care Insurance for my wife, for myself and for my mother-in-law.

It’s a very simple proposition: If (G-d forbid) our health takes a downturn, we can receive up to $10,000 per month tax-free to pay the costs of care in a facility or in our own home. An additional policy rider says if we never make a claim our family gets back all the premiums paid, in full.

Some people call it a no-brainer. I call it peace of mind, but ONLY in the context of a comprehensive plan for tax, estate planning and estate preservation.

If Long Term Care Insurance is not on your radar, consider this self-funding strategy: buy some joint-last-to-die insurance to recover the costs of care and leave something for your family instead of a health care facility.

The TaxLetter® published my article that describes how to use both Long Term Care Insurance and Critical Illness Insurance in a defensive asset protection strategy. Read it HERE.

Whatever you call it, it just makes sense.

Stay healthy