Why is this area important?
Improvements in healthcare and generally being healthier have led to an increase in average life expectancy. As a result there are now more choices individuals have in terms of residential accommodation and care. Some may choose to stay at home and rely on help from family, friends and local authorities; however some may prefer to move into residential accommodation where they can be with other individuals in similar situations and be looked after by professionals. What this essentially provides the individual with is choice.
What Solutions are there?
There are a variety of solutions available for individuals which could potentially provide the individual with financial assistance later on in life and meet their long term care requirements. The options are described in a little more detail below;
Private Medical Insurance.
This could help to pay for the cost of short term medical care, subject to various limits according to the level of cover taken.
Health Cash Plans.
This could help pay a set amount for every night spent in hospital and may also provide help towards payment of professional care fees. This again would be subject to various limits according to the level of cover taken.
Pre funded Long Term Care Insurance.
These policies are designed to to pay out a regular sum if the individual requires continuous care.
Deferred Care Plans.
These will often provide a benefit after a period of time where the individual is expected to fund the care themselves in the interim period. As a result, the cost of these policies can be less expensive than some of the other options.
Long Term Care Bonds.
These are investment bonds which have an element of insurance attached to them which could pay out to help towards long term care costs.
Immediate Needs Annuities.
These policies are bought at the point an individual enters a care home, or are already a resident. A lump sum investment is traded for an income for the rest of their lives, and the policies are medically underwritten so often high levels of income can be generated depending on the clients’ health situation. Immediate Needs Annuities are often taken out by representatives of the clients such as solicitors or power of attorneys, and are particularly useful in reducing the potentially unlimited burden on the estate of an individual once they have entered, or are about to enter, a care home.
There are many different financial products which can provide help and assistance with care needs as one gets older. Many of these are no longer available to take out now as providers have removed them from their range of products, however, if an individual already has one of these policies, it may be that it is still valid and can be used in the overall planning process.
There are advantages and disadvantages to all of the methods described above, however which one, if any, is right for you, depends entirely on your individual circumstances. No two clients are the same, and therefore no two pieces of advice are ever the same.
