Protection
Long term care
Long Term Care Insurance is designed to provide payments for those who are no longer able to look after themselves, very often because of increasing debility from advanced age.
The opportunity to buy an insurance policy to cover the costs of long term care is comparatively new, as historically the State has paid in the majority of cases.
The Community Care Act of 1993 changed all that by transferring the burden of financing long term care bills to local authorities with limited resources. The resultant problems have been so great that a Royal Commission was appointed to investigate the matter. It came out with various proposals, but these are unlikely to help individuals unless they have very limited financial resources.
Meanwhile it seems inevitable that the cost of providing long term care will increasingly be borne by the individual sector and not the state.
As the costs of providing long term care rise with people living longer, so the demand for a source of funds to pay the costs has increased.
New forms of long term care insurance products are entering the market all the time as the seriousness of the potential financial problems become more widely known.
Protection section links:
a guide to family protection | life assurance cover | term assurance | whole of life assurance | private medical insurance | critical illness | long term care
For example, instead of taking out an insurance policy simply to cover the cost of possible long term care, it is now possible to arrange an investment bond which pays out if there is a need for long term care, but also provides an investment return if the need does not arise. Since it is estimated that one in four males and one in three females will need long term care* this latter solution is seen by many to be a good compromise.
