Plan now to pay for care
For those potentially needing care or already in a care home, one funding option option which could be considered is an Immediate Care Fees Plan.
The plan is a contract between the resident of the care home and an insurance company that guarantees to make regular payments in return for a non-refundable one-off lump sum.
The amount of the lump sum needed to purchase the plan will depend on the resident’s age and state of health, the income required and whether or not this needs to increase over time, but also depends on any capital guarantees as may be selected.
The benefit of the plan is that it provides certainty as to how much capital will be used to meet care home fees, and therefore certainty as to how much capital will be left as an inheritance.
The potential disadvantages of the plan are that it can be expensive (but then again so are the care home fees!), the premium paid may not be enough to cover all costs of care at the commencement of the plan or as time passes, and there is no cash-in value to the plan.
For the right scenario these can give crucial peace of mind and monetary funding, but as they are a complex area of financial planning independent financial advice must be sought.