ConsumerInfo on Health Insurance
Manulife Nursing Care Income Plan Offers To Help Canadian Families Cover Costs For Long-Term And Nursing Home Care
WATERLOO, ON, Sept. 3, 2002 - Manulife Financial is launching a new annuity called the Manulife Nursing Care Income Plan designed to help Canadian families cover costs to care for their elderly family members who need nursing home or long-term care.
"Through one up-front investment, this annuity provides families with a better option to more effectively cover ongoing bills for nursing care," said Bruce Gordon, Manulife Financial's Executive Vice President of Canadian Operations.
"Canadians today are living longer than previous generations and that trend has created a greater need to effectively finance long-term care for our elderly."
Rising costs for care
Both nursing home care and home health care can be expensive - and costs are rising. Trying to budget for an unknown period of care can create stress for many families, particularly if a parent is among the one in five Canadians who live in a nursing home for longer than five years.
"Arranging nursing home or long-term care for an elderly family member is difficult enough on its own," added Rick Annaert, Manulife Vice-President of Wealth Management. "The cost of care is another serious concern for many of the more than 45,000 Canadian families a year that face that difficult decision."
All Canadian provinces have user fees for nursing homes, with accommodation costs partly paid by the resident's province, while the residents or their relatives cover some of the costs. Maximum fees vary significantly from a low of $11,900 a year for a single room in Alberta to a high of $57,240 in Nova Scotia(1). For top-of-the-line private care, expenses can exceed $80,000 a year.
Extra needs for a walking aid, therapy or any supplies excluded by government plans can also add to costs.
"The emotional toll is taxing for both parents and their children," said Mr. Annaert, "At Manulife, we are working to help families effectively cover the unknown and indefinite costs of care, which allows them to focus on each others' needs rather than coping with financial stress."
Many families fund such care expenses through critical illness insurance or long-term care insurance. Others without such insurance coverage often cope by selling part of a potential estate - either a house, car or other assets. While such assets have finite value, indefinite costs for care can expose families to financial problems in the future.
A new option is now available through the Manulife Nursing Care Income Plan. For a one-time investment, a guaranteed lifetime income can provide a specific monthly cash flow fixed up-front, regardless of how many months or years the income is needed.
"What makes this option unique is that the investment necessary to provide the desired income is much lower than the cost of a traditional annuity, particularly if the annuitant suffers from a serious health condition," Mr. Annaert says.
Nursing care patients with a serious medical condition such as cancer, stroke, chronic heart disease or Alzheimer's will generally qualify for the plan. To determine their reduced life expectancy, Manulife is utilizing a medical assessment method that was designed especially for nursing care patients, unique in Canada and exclusive to Manulife Financial. This unique medical assessment method is the key in providing the lowest possible up-front cost to fund the required monthly cash flow.
For example, an 83-year-old woman with Alzheimer's facing fees of $21,600 a year for nursing home care could cover that annual $21,600 cost indefinitely with an investment of $67,888 in the Manulife Nursing Care Income Plan.(2)
By taking her health condition into account, the plan saves as much as $78,380 for her and her family, compared to a traditional annuity based on her age alone.
The Manulife Nursing Care Income Plan requires one up-front investment that can come from a family member's pension, Registered Retirement Savings Plan or Registered Retirement Income Fund or from non-registered savings.
Manulife Financial is a leading Canadian-based financial services group operating in 15 countries and territories worldwide. Through its extensive network of employees, agents and distribution partners, Manulife Financial offers clients a diverse range of financial protection products and wealth management services. Funds under management by Manulife Financial were Cdn$139.8 billion as at June 30, 2002.
Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '0945' on the SEHK. Manulife Financial can be found on the Internet at www.manulife.com.
(1) Alberta Health & Wellness Report, 2001
(2) The investment stated is based on an 83-year-old woman with Alzheimer's who requires level 3 skilled nursing care. Figures shown are for illustrative purposes and are not guaranteed. The Manulife Nursing Care Income Plan requires a minimum $25,000 investment and is available to those 45 or older.