Long Term Care Insurance Guide for Nursing Home Care
Just at the time in our life when you want to be worry-free, you can find yourself wondering about what will happen if you or a partner or parent needs care over the long term, and whether nursing home insurance is the answer.
This kind of care is for people who can no longer carry out basic living tasks on their own and are having difficulties with washing, dressing, going to the toilet or getting out of bed. A nursing or residential home may be the best option at this point to enable the person to live with dignity.
However, twenty-four-hour care is expensive to provide, and many people worry about their ability to fund it when the time comes. If you are wondering “Could I afford nursing homes near me?” then you need to look at all the possible insurance policies and other options. These may offer a way to fund long term care and to provide against rising nursing home costs, especially in the light of rising inflation generally.
Unfortunately, the government is of little help. If you have more than £23,250, including your house, then you have to pay the whole cost of care yourself. Recent attempts to change the system are now in doubt, and the future is uncertain. So there’s probably never been a better time to look at insurance for long term care. Let’s look at the types of scheme that are available.
Immediate Need Annuity
If you have care needs now, you make a one-off lump sum payment and get an income guaranteed for life. Some people choose to sell their house and take the annuity so that they can fund their care. Obviously, you need to look at the cost of your care and how much your annuity will provide. However, if you have certain medical conditions, you can get a higher annuity.
Use Your Pension for an Enhanced Annuity
If you haven’t yet taken your pension but you have a medical condition that you feel may affect your longevity, you can get an enhanced annuity from your pension.
If you feel that releasing part of the equity in your home would fund your care, this can be an option. But you will need expert financial advice before taking this step.
Council-Funded Loan Schemes
The council is required to offer you a “deferred payment” arrangement. This lets you borrow money against your house to pay for your care with a low rate of interest, which is repaid along with the original loan on your death. They don’t exactly shout about it from the rooftops, but the option is there. For many people it’s a better choice, as the house may have increased in value in the meantime or can be used by members of the family, especially if they are travelling a long way to visit.
Take Expert Advice
These are complex decisions, and when you are unwell it can be difficult to think things through. It’s essential to contact an independent financial adviser, who can go over all the possible options for funding a nursing home before you take any decision. Independent advisers who have special training hold a CF8 qualification, which enables them to explain the costs and risks.