What is an Immediate Care Plan? |
Put simply it is the payment of a lump sum premium to a provider, who then guarantees to pay the shortfall in care fees for as long as necessary. |
Can anyone buy a Care Plan? |
No, it is specifically designed mainly for the elderly who have assets above the means tested threshold for Social Services financial assistance and are receiving or about to receive care. They also have to fail at least one activity of daily living (ADL). |
What are the definitions of activities of daily living? |
Moving - the ability to move from one room to another on a level surface.
Washing - being able to wash and bathe unaided, including getting in and out of a bath or shower.
Dressing - being able to take off, put on, secure and fasten all necessary items of clothing.
Transferring - being able to get on and off the toilet, in and out of bed to an upright chair, or a wheelchair and back again.
Feeding - able to eat pre-prepared foods unaided
Continence - the ability of being able to control bowel and bladder functions
Mental Impairment - where a persons ability to reason, remember or understand, has deteriorated to a point that they are unable to look after themselves without the constant supervision or assistance of another person.
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How is the premium calculated? |
It is based on the amount of shortfall in payment fees after taking into account the current income, the age and medical situation of the recipient. |
Does the person needing care need to be in good health to take a policy out? |
No, it is actually an advantage if they’re not!
If the recipient is in poor health with a reduced life expectancy the cost of the policy will be less than for someone in better health. |
What are the main advantages? |
It guarantees to pay the care fees for as long as necessary, and ensures that both the elderly person and their family has the peace of mind that the money will never run out.
It also means the remaining investments can be better invested to produce growth rather than income. |
What are the risks? |
There are two risks; the first that the elderly person dies early in the plan (although there are ways of mitigating this); the second (and larger) risk is to the provider, who has an indeterminate period of having to meet the shortfall in fees. |
What happens if the elderly person has to move from a residential to a nursing home where the fees are much higher? |
We allow for this eventuality in the initial planning stage. The care fees payment plan can be topped up or the extra income required can be taken from the remaining investment. |
Why should I consider a care fees payment plan when the income from my investments easily cover my care fees? |
The value of your estate is probably well above the current threshold for Inheritance Tax. A payment into a care fees plan will reduce the value of your assets thereby saving your estate 40% . Also a plan would give a far greater return on your money than any other investment. |
What if an Immediate Care Plan is unsuitable? |
There are often other alternatives and we can advise you of these. |
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www.the-insurance-surgery.co.uk is a trading name of The Money Surgery Limited which is an Introducer Appointed Representative (FSA registration number 511725) of The Insurance Surgery Ltd who are authorised and regulated by the Financial Services Authority (FSA registration number 401425). The Insurance Surgery Limited, registered in England No. 5137288 Registered Office: Wood Street Mill, 45 Pickford Street, Macclesfield, SK11 6HB. Telephone 0800 083 2829
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