Care Fees Plans
We have used the term 'Care Fees Plan' above. This isn't to be confused with a care plan your local authority will provide when you have care needs. It is the simplest term used for Long Term Care Insurances. Other names for a Care Fees Plan are:
Immediate Needs Annuity
Immediate Care Plan
Care Fees Payment Plan
Care Fees Annuity
Care Funding Plan
Immediate Lifetime Care Plan
Deferred Care Plan
Secured Lifetime Care Plan
Immediate Need Care Fee Payment Plan
They are all essentially the same type of financial product, an impaired life annuity that pays a guaranteed income for life.
Care Fees Plans are specifically designed to help fund care, once purchased they may help protect the remaining assets. If used correctly they can meet most if not all the shortfall in care costs.
They are tax free if the benefit is paid directly to the registered care provider.
The cost of a care plan is based on age, health and the level of benefit it pays. It will also depend on when the benefit is paid and whether there is any escalation (increase) in benefit payment built in.
They can appear expensive to buy, but they do pay a regular income to help fund care. There are risks involved but they can provide "peace of mind" by helping secure care funding for life. Only qualified financial advisers can advise you about these products.
There are 2 distinct types:
Immediate Care Plan - This is a plan that pays the benefit (income) immediately, usually to a care home. It is purchased with a single lump sum. The premium (lump sum) can usually be partially protected in the event of early death.
Deferred (Secured) Care Plan - a plan similar to the Immediate Care Plan, but has a deferred period before the income is paid. The deferred period is usually between 1 and 5 years. The premium can be either a single lump sum or sometimes paid annually during the deferred period.
There are currently 2 companies that provide Care Plans. Make sure your specialist care fees adviser gets quotes from both. Ask them to compare Immediate and Deferred Care Plans for you too.
A specialist care fees adviser should indicate how long your savings will last when paying for care, what the shortfall is in your care fees, and how much a care plan will cost to meet the shortfall, taking into account inflation. They should also consider the other options to help fund care and clearly explain the benefits and risks for each option.
Funding care can be complex, if you are self-funding you may be concerned about your money running out, and what happens when it does. Will the local authority help fund your care? How much will they pay? It may be wise to speak to a specialist care funding adviser to help you understand and consider the options you have to help secure your chosen quality of care for your lifetime.
So where do I find a Specialist Care Fees Adviser as I need care fees advice?
To advise in a long-term care insurance contract advisers require a specialist qualification which is recognised by the Financial Conduct Authority (FCA). Ask your adviser what qualification they have.
We believe there are some very experienced care fees advisers who are members of the Society of Later Life Advisers (SOLLA). All their members must adhere to a code of practice and full members must be fully accredited. They will have the required long-term care insurance qualification, but more importantly they would have been through an accreditation process which measured their skills and experience in working with, and understanding the needs of older people and their families and carers. You may find other websites with qualified care fees advisers too, such as Symponia and the Paying for Care website.