Does Your Retirement Planning Include the Costs of Medical Care?

Oct 21, 2014

Many Canadians invest in RRSPs hoping that they will have a nest egg to enjoy when retired. In Canada, we purchase travel insurance for trip cancellation, house insurance for fire and car insurance for accidents. We are a society of insurance.

As Canada’s population continues to age, there are deep concerns that the healthcare system will not be able to handle this increasing burden and the associated costs for seniors. By 2020, there will be as many seniors as children.  

Most Canadians have a false sense of security that during their retirement years, the government will take care of them. This may have been the case many years ago but nowadays, Provincial Health Insurance will cover the basic needs – physician visits, hospital visits and diagnostic treatments. In terms of long-term care, we can expect long waits, outdated facilities and reduced services. It is estimated that 43% of Canadians over the age of 65 will spend time in a nursing home or long-term care facility. How will these expenses be covered? Many Canadians will look to their retirement nest egg for help.

Recently, Canadian insurance companies have begun to offer insurance – Long-Term Care Insurance – for those who want to protect themselves against the costs associated with home care or long-term care facility care during their retirement years.

Companies sell policies that combine benefits and coverage in different ways. Some plans will pay benefits for 1, 2 or 5 years or even an unlimited number of years. The policies can be paid out by reimbursement of expenses, indemnity or income. It is recommended to shop around and compare the different policies to that best suit your needs.

Your future medical health is as important as your future financial health.

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