Long-term care insurance provides the financial support you need if you have to pay for care assistance for yourself or a loved one. Long-term care insurance can cover the cost of assistance for those who need help to perform the basic activities of daily life such as getting out of bed, dressing, washing and going to the toilet.
You can receive long-term care in your own home or in residential or nursing homes. Regardless of where you receive care, paying for care in old age is a growing issue. Government state benefits can provide some help, but they may not be enough or may not pay for the full cost of long-term care.
The level of state support you receive can be different depending on whether you live in England, Wales, Scotland or Northern Ireland. In England and Wales, for example, you can also receive means-tested state assistance, which depends on your savings and assets. For instance, if your savings and assets are above £23,250 in England, you will normally be expected to pay for the full cost of long-term care yourself.
Types of long-term care plans include:
- Immediate needs annuities – pay a guaranteed income for life to help cover the cost of care fees in exchange for a one-off lump sum payment, if you have care needs now
- Pre-funded care plans – the option of insuring your future care needs before they develop (these plans are no longer available to purchase)
Other options include:
- Enhanced annuities – you can use your pension to buy an enhanced annuity (also known as an ‘impaired life annuity’) if you have a health problem, a long-term illness, if you are overweight or if you smoke. Annuity providers use full medical underwriting to get a more accurate individual price. People with medical conditions including Parkinson’s disease and multiple sclerosis, or those who have had a major organ transplant, are likely to be eligible for an enhanced annuity
- Equity release plans – give you the ability to get a cash lump sum as a loan secured on your home – these can be used if you are looking to fund a care plan now or in the near future
- Savings and investments – give you the opportunity to plan ahead and ensure your savings and assets are in place for your care needs
If you are already retired or nearing retirement, it makes good sense to take advice to ensure that your affairs are in order, for example, arranging your will or a power of attorney. It also makes sense to ensure your savings, investments and other assets are in order in case you or your partner may need long-term care in the future. Contact us today on 02380 420 606 to find out more.