An overlooked peril of the ageing population is the greater need for healthcare and the costs of long term care rising. There are essentially two ways to fund long-term care: a pre-funded policy or, if the situation has already arisen, by using an immediate care plan. At the moment people tend not to be thinking ahead to long-term care so the vast majority do not have any pre-funding. However, this might not be a problem if costs can be met out of income or existing savings.
In the case of short term requirements, using income or savings could be the most appropriate course of action. In the longer term - what happens if payments for care increase? How long will the savings last? What if you live longer than expected? An ‘immediate care plan’ guarantees to cover any shortfall between what you can pay and the actual care fees for life – or for as long as you need them, whichever is sooner. These ‘immediate care’ plans balance the risk that you will live longer than expected and need more money than you invest, with the fact you may die earlier than expected and lose more money than you would have done just paying the fees.
Finding a lump sum may be difficult but thanks to house price rises, releasing equity from the family home may also be an option. This brings its own considerations and must be considered carefully, in detail. Such a move could also help with estate planning.
We can discuss with you and your dependents - in a sensitive manner - the subject of long term care and how your needs can be funded. There are many options, all of which bring their own unique advantages and disadvantages. These would be outlined to you.
