18 January 2016

Long Term Care Uncertainty

We thought that things were getting clearer in sorting out who was responsible for paying for what when it comes to long term care in later life. Unfortunately, although the Care Act 2014 was passed and the first part was implemented in May 2014, the second, more significant, part has been deferred until 2020. In political terms that's almost like saying "never".

The second part included a care cap - limiting how much each person would need to pay before the state contributed, and an increase to the means-tested threshold from the current £23,250. Although neither aspect was quite as simple as the initial headlines indicated, it would certainly have provided some certainty when planning for later life.

In the meantime, one option is to take advantage of the extensions to Whole of Life insurance introduced by a handful of providers. As well as paying out on death, these will pay out if the policyholder suffers an illness which leaves them permanently incapable of looking after themselves. That money could be used towards care costs.

Products vary, but typically a proportion of the death benefit is paid out. In some cases an early payment means no later payment on death, while in others you still get some benefit on death as well (or your family does!).

Like all financial products these will not be suitable for everyone, but they may be appropriate to provide some certainty. We would recommend taking professional advice to research what is available and find out what is most appropriate for you.

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