The Risk Dilemma
"I'm used to insuring for things that I don't want to happen, not things that I do!"
We usually insure against risks that, should they happen, will cause us significant financial hardship, such as a house fire or car accident.
Care is Different
Care is different. The biggest financial risk you face when purchasing care is something that hopefully you do want to happen; longevity.
In the event of longevity you could use a significant amount of your money, or even find that your assets have run down to the level where you will recieve local authority funding. Sadly this is often insufficient to fund many private care homes and you could be asked to leave your home or a family member may be required to top up your funding.
If you have live-in care in your own home and your funds run down your local authority may be unwilling to provide funding. You may be required to move into a care home, unless other funding can be arranged, such as releasing equity from your property.
If you are in a care home charging £750 a week, you will be spending £39,000 a year. A stay of 5 years, assuming that the fees increase by 5% a year will cost you around £215,500.
The Usual Solution
The usual solution is to insure your care using an immediate Care Plan or Care Annuity. In return for a lump sum premium an insurance company will agree to pay you an income for the rest of your life. The plans are fully underwritten and the premium is based on the insurers view of your age and state of health.
However, the premiums can be heafty and many people feel that this solution simply replaces one risk with another; that of the loss to the estate of a substantial premium in the event of a premature death.
We work with you to arrive at a solution that provides the same long term guarantee as an immediate care plan but with less risk to your estate in the early years. We do this by using a mixture of cash deposit accounts, deferred annuities and investments where appropriate.
Your plan will be individually designed to suit you and your circumstances.