Susan, age 58, is considering purchasing long-term care (LTC) insurance. She is in good health but is concerned about potential future care costs. Her financial planner discussed options, including a daily benefit of $200, an elimination period of 90 days, and a benefit period of five years. What is a key characteristic of Canadian LTC insurance policies that Susan should understand?

Question: Susan, age 58, is considering purchasing long-term care (LTC) insurance. She is in good health but is concerned about potential future care costs. Her financial planner discussed options, including a daily benefit of $200, an elimination period of 90 days, and a benefit period of five years. What is a key characteristic of Canadian LTC insurance policies that Susan should understand?

Answer options:

• Benefits are typically paid as a lump sum upon diagnosis of an LTC condition.
• The policy will cover the full cost of any long-term care facility, regardless of the daily benefit limit. ✅ Benefits are triggered when the insured requires assistance with a certain number of Activities of Daily Living (ADLs) or suffers from cognitive impairment.
• Premiums are guaranteed to remain level for the life of the policy once purchased.

Correct answer: Benefits are triggered when the insured requires assistance with a certain number of Activities of Daily Living (ADLs) or suffers from cognitive impairment.

Explanation: LTC insurance in Canada typically triggers benefits when the insured can no longer perform a specified number of ADLs (e.g., bathing, dressing, eating) or has a significant cognitive impairment. The benefits are usually paid as a daily or monthly reimbursement up to a limit, not a lump sum.