Long Term Care Insurance
Long term care insurance could help you to pay for your long term care needs. In the past long term care insurance could be taken out either before or at the time that a person required care, but it is now only possible to take out a long term care insurance policy if you require care immediately.
How does long term care insurance work?
In return for a single premium a long term care insurance policy will pay out a regular intervals toward the cost of your care. This pay out will either be towards care needed in your own or towards a place in a care home.
The majority of us will need some form of long term care at some point during our life, and planning ahead to meet these probable needs can be an important step it getting the level of care that we expect.
There are two main types of long term care insurance:
- Pre-funded long term care insurance. This type of policy worked like a traditional insurance policy with the buyer insuring themselves against the future possibility of requiring long term care. This type of policy is no longer available on the market, but you may already possess one.
- Immediate long term care insurance. You buy this type of policy at the time when you need care, insuring yourself against the future cost of long term care. Immediate long term care insurance policies are a type of annuity and also known as a care needs annuities. These policies may last for a limited period, or continue to pay out until your death. This type of policy is only available to those assessed as needing care immediately.
Who qualifies for long term care insurance?
If you have difficulty with at least two or three activities of daily living such as bathing, feeding or mobility you may qualify for an immediate long term care insurance policy.
The premium for long term care insurance will be based on your age, gender and the state of your health, as well as the amount that you are able to put forward as a premium and the level of income that you require.
What next?
Once you take out a long term care insurance policy you may not be able to exit, so it is important that you consider your options carefully before proceeding. You should always make sure that your long term care insurance seller is regulated by the FSA so that you are covered if anything goes wrong.
Deciding on whether long term care insurance is right for you and choosing a policy to suit your needs can be complex. You may want to speak to a member of the long term care planning advice team at one of our partner firms for impartial advice and a free initial consultation.
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