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This website contains information which may or may not be applicableto your own situation and circumstances.

Any information or advice on this site does not constitute a personal recommendation. If you have any doubts as to whether a product or service is suitable for you, please seek independent advice.

Care Fees Advice (page 2 follow on)

Let us look at the 4 alternative methods of funding Care fees:

1. Deferred Care Fees Insurance

A recent innovation in the market is this method which puts a “ceiling” on your liability for fees. This is a relatively new side to long term care fees insurance and works to effectively 'cap' a person's liability to pay for care fees. The plans are designed for those who are already paying fees. If you want to limit the amount of time that fees are paid these contracts can pay out at a future date. This type of plan can be paid for either with an up front lump sum or on an annual basis, usually paid until the set date..

2. Regular Premium Long Term Care Insurance

It is possible to insure against fees by paying either a one off lump sum or by regular premiums (either annual or monthly). You decide the level of fees you want the policy to pay for and the costs will be worked out on this amount. Many plans have the flexibility to allow a blend of lump sum, annual and monthly payments allowing you to design the payments in the way most suited to you. Payments from you will normally cease once the insurance starts to pay out, you can also cancel the policy if you decide you don’t need it any more.

Even if you are already in care it is not too late to make some provision for fees through

3. Immediate Care Cover

By paying a lump sum now you can cover all or a portion of the fees for your lifetime. The provider will calculate the cost using various factors e.g. the amount required as fees and your life expectancy.

The plan can be set up to provide protection against inflation and can also allow for some money to be returned to your family after your death, normally within a specified period.

4. Investment Based Long Term Care Insurance

This is a plan where a lump sum is invested, this is normally appropriate to the level of fees you wish to provide for. The money is invested according to your attitude to risk. The plan will be reviewed on a regular basis to ensure that as far as possible there is sufficient growth to provide for the fees you require. If a need for fees arises they are taken from the investment, normally the plan will cover the required fees even if the fund is reduced to zero. If you do not need fees or if you decide to cancel the plan it is Once you need care the fees to pay for it are drawn down from the investment. If your usual for the value to be returned to you.

Can your capital be ringfenced from the authorities?
No, not really, unless you start planning now.

Is protecting your wealth your number 1 concern?
You could protect your family assets and you could put yourself in a position where you could be looked after at home rather than having to enter the residential system, an option that most people find preferable. Care fees insurance will give you the choice of how you are treated.

Care fees insurance

Care fees insurance can be looked on as a way of protecting your hard earned assets from the care fees system, this would ensure that you would be able to pass something on to your family.

When deciding whether to pay out the benefits from your care fees insurance when you need care, the company will look at how able you are to carry out certain day to day tasks, known as activities of daily living (ADL’s). As an example here is a list taken from the policy of a major insurer:-

• Are you able to move around your home from room to room?
• Can you get in and out of a shower or bath to wash?
• Can you get dressed and undressed?
• Can you feed yourself if the food has been prepared for you?
• Are you able to get on and off a toilet?
• Can you get from a chair to your bed?

If you aren’t able to carry out the above without assistance (normally judged over a set period of time), the care fees insurance will start to pay out.

If you can carry out some of the above tasks but not all some plans will pay a proportion of the benefits usually when you are unable to carry out 2 of the listed ADL’s unaided. If you then became of carrying out a 3rd ADL the full benefit would be payable. The money from the plan could be used to provide adaptations and equipment which would allow you to stay in your home.