In instances where state support is not sought or is unlikely to be available due to
the capital value of the client there still remains opportunities to
fund the care cost by differing means.
The first choice is to cover the costs from current income and interest
from investments. Now that the interest rate has declined this element
of income has reduced substantially and for many the above possibility
is no longer a reality without having to dip increasingly into
capital. For most people this need to dip into capital is a concern
because it can effect the inheritance they had hoped to pass on to
their family, and secondly they cannot be certain as to how long they
will be requiring care and at what level of cost. Will they be able to
fund the care or will they be forced to ultimately look for state
support?
These risks can be managed in many cases by the purchase of
one of two financial products.
- Annuity
In this case the client invests a sum of money that will guarantee the
payment of fees to the care provider. The annuity covers the difference
between the clients pension and investment income and the providers
charges. The Annuity Company will consider the likely value of the
shortfall, the age and medical report of the client. In this case the
financial company assesses the risk and defines the capital sum
required. The client knows what capital remains for inheritance or
other use and is guaranteed ongoing care provision with no financial
worries.
- Long Term Insurance
In this case the client will consider the insurance of possible care
costs at an earlier stage in their life. The payment on the policy will
be triggered when the client is assessed as having need for support
resulting from their incapability to perform unassisted a certain
defined number of "Activities of Daily Living" (ADL's). The cost of the
insurance will be dependent on the stage at which the policy is
activated and the number of ADL's on which the policy is triggered.
This section is established to provide only general information and it
is recommended that clients and their carers or relatives should
access professional advice either through an
Independent Financial Advisor or through a body
such as the Nursing Home Fees Agency.
access to finance |
fee differentials |
I.F.A's.
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