Healthier lifestyles and advances
in medicine mean that you can expect to live longer than your parents.
You must, however, balance this good news with the increased possibility
that you will suffer from an age related illness or disability. As
you grow older it may become more difficult for you to remain independent,
not just because of a medical condition, but because you may be unable
to carry out everyday tasks or activities
of daily living (ADLs) without
help.
Whilst more and more people will need care, less help is being provided
by the State and Local Authorities. As the cost of care increases and
the proportion of taxpayer's contribution decreases, only the very
needy are likely to receive assistance. Although the State and Local
Authorities may provide some benefits, they are likely to be subject
to means testing.
Families are now smaller and there will be fewer younger relatives
to rely on. This means that community, residential and nursing home
care are now playing an increasingly important role.
The difference between a residential home and a nursing home is the
level of medical cover provided. The medical cover in a residential
home may be limited but a nursing home provides 24-hour nursing.
The Community Care Act, which came into force in 1993, passed the
responsibility for long term care from the NHS to Local Authorities.
The extent and amount of payment from Local Authorities is under review.
Local authorities and the DWP use different levels of assets for means
testing.
There are basically two types of long term care plans:
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Protection Based |
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The protection products can be either regular
or single premium funded. The majority of regular premium products do not
have any surrender value or death benefit. Single premium contracts may
have a death benefit within a certain time period. This may be part of
the main plan or may be covered by extra life cover with the contract. |
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Investment Based |
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The investment-based contracts are either regular
premium or single premium unit linked or 'whole-of-life' based contracts.
They are dependent on unit linked investments funding the long term care
protection plan. The value of the investments funding the plan can go up
as well as down and is not guaranteed. The majority of long term care benefits
are paid tax-free as they are paid directly to the care provider. |
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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