Despite large numbers of baby boomers facing retirement in the coming years, 71% of Canadians do not have a plan to cover the costs of caring for parents when they get older, according to an RBC Insurance/Ipsos Reid poll.

“Baby boomers are facing the added financial pressure of caring for their own kids, while also needing to care for elderly parents as well,” says John Young, president and CEO, RBC Life Insurance Co. “If an older parent or relative requires home or personal care, it can get very expensive and may jeopardize their financial security.”

The poll also found that 48% of Canadians do not know the cost of caring for an aging parent or relative in a nursing home or other care facility and 62% do not know the costs of caring for an aging parent or relative in their homes.

The number of Canadian seniors is expected to nearly double and grow to 8 million by 2026, according to Statistics Canada. Many of these seniors may require expensive long-term medical care. With a private room in a long-term care facility costing a minimum of $2,125 per month, it’s important to have a financial plan in place that will help to cover these expenses and avoid draining your savings.

“People are living longer and that means retirement funds need to be securely preserved over a longer period of time,” adds Young. “Without a plan in place to cover expensive long-term care costs, individuals would have to make some difficult lifestyle choices in order to make ends meet.”

Long-term care insurance can help provide clients and their families with benefits that would assist in covering the cost of health and personal care services for individuals who become unable to care for themselves.

Here are a few things for them to consider:

• Look at critical illness or disability insurance policies that have a long term care conversion option attached to them. These policies allow clients to switch over to a long-term care insurance plan between the ages of 55 and 65 without a medical exam — thereby protecting their future insurability.

• Policies featuring a cost of living adjustment benefit can ensure that daily benefits are adjusted to match inflation.

• Future purchase options should be considered to make it easier for clients to buy additional coverage in the future without providing medical documentation. Some policies offer discounts for two or more policyholders living in the same home.

Ipsos Reid poll conducted the survey on behalf of RBC Insurance from March 27 to April 1. A representative randomly selected sample of 2,251 Canadian adults was interviewed by telephone. With a sample of this size, the results are considered accurate to within ±2.2 percentage points, 19 times out of 20, of what they would have been had the entire adult population of Canada been polled.

IE