Long Term Care
Long term care assurance is designed to pay for all
types of domiciliary or nursing home care for people who are no longer
capable of looking
after themselves without assistance. It is needed for conditions
which are unlikely to improve, and is distinct from acute care
which is required for the short term and will relieve the underlying
condition.
Local Authority Considerations
When local authorities consider what level of care is required,
they will take into account disabilities, age or both. However
the main consideration when they assess whether they will help
with the cost of care is assets. Assistance is means tested:
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Assets exceeding £19000 - no assistance |
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Between £11750 and £19000 - sliding scale,
no fixed benefit |
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Less than £11750 - costs met in full
or part by the local authority - but what quality of nursing
home? |
The above rates are accurate as at 8 April 2002 and are subject
to change. (Source: Devon County Council)
The Department of Work & Pensions (DWP) levels for means testing
are £16000 and £10000 respectively.
Main Residence
The main residence will be taken into account if the owner doesn't
live there due to moving to residential or nursing home care. If
the property isn't sold, the Local Authority may place a charge
on it and make a claim when it is eventually sold. The main residence
is not usually considered if a wife or husband, a child under 16
for whom the resident is legally responsible, or an elderly (aged
over 60), ill or disabled relative still lives there.
Other assets that are taken into account are:
Savings & Investments
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Cash in Bank and Building Society Accounts |
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National Savings Certificates and Accounts |
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Premium Bonds |
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Stocks & Shares |
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Assets held abroad |
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Payments from charity or other financial gifts |
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Property other than main residence |
Income
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Retirement Pension and Company Pension |
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Income from Annuities |
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Earnings from employment or owning a business |
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Most Social Security Benefits |
Assets that are not usually taken into account are:
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Cash-in value of any Life Assurance or Annuity
Policy |
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The value of any personal possessions (unless bought to reduce
the amount of savings to qualify for benefit). |
Income not usually taken into account includes:
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Mobility component of Disability Living Allowance |
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Payments from the Social Fund |
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Pensioner's Christmas Bonus |
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Most expenses from either voluntary, charitable or paid work |
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The special War Widow's Pension |
Activities Of Daily Living (ADLs)
The product providers pay the benefits from a long term care plan
when certain activities of daily living can no longer be performed,
without third party assistance. Below is a list of common ADLs
taken into account by product providers when assessing claims:
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Washing |
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Dressing |
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Using the toilet |
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Continence |
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Mobility |
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Eating and Drinking |
An Ageing Population
Life expectancy is now greater than ever before. The number of
people over state pension age is projected to increase from 10.
8 million in 2000 (estimated total population 59. 8m) to 11. 9
million in 2011 (estimated total population 62m). (Source: The
Office of National Statistics, Population Trends 107, Spring 2002.)
Key Points
Long term care should be considered as part of most clients' portfolio.
Retirement is probably the best time to think about your long
term care planning.
The Financial Services Authority does
not regulate advice on private medical insurance and long
term care contracts, although it does regulate the financial
soundness of insurance companies.
Levels and bases of, and reliefs from, taxation are subject to change.
Tax reliefs referred to are those currently applying and their value will
depend on the circumstances of the individual investor. |
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Telephone
0845
165 1280
General Insurance
0845 165 1281
Fax
01626 332622
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