17 LTC: Product Solutions

Question 1

What are the 3 types of care solutions?

Answer 1

Pre Funded Insurance - Pure Protection Based and Care Bonds
Immediate Needs Annuities (INA)
Equity Release 2 types Lifetime Mortgages and Home Reversion Plans

Question 2

What are the main features of risk based products?

Answer 2

1. No investment value
   2 Benefit is normally pay out direct to care home as a regular
   3 Normally choose at outset eg if fail 2 ADL’s or more severe fail 3+ ADL’s
   4 Reviewable
   5 Paid Tax Free

Question 3

What are main characteristics with Convertible policies

Answer 3

1. Options usually found in WOL and IRP plans
   2 18+
   3 Usually def period 13 weeks to 52 weeks
   4 usual current cost basis or reviewable

Question 4

Who would suit and main Features of the Zurich Adaptable Life Plan

Answer 4

1. someone requiring life cover in event of death or terminal and someone concerned about LTC costs
   2 WOL with life life option
   3 later life options pays reduced cash sum from age 70 to a mx £400K.
   4 Max age at outset 65
   5 benefits payable on fail 3 out of 6 ADL’s or suffer cognitive impairment

Question 5

What are 5 common features of pre funded LTC products?

Answer 5

1 wtg/deferment period, in order 13 wks
2 Limited Payment Period - ceiling on benefit
3 Care Support Services eg providing counselling, assistance with care
4 Assistive Devices. Provide Equipment or maybe home modifications
5 Providing for inflation usually RPI or fixed eg 5%pa

Question 6

What are Care Bonds?

Answer 6

1 Lump Sum investments
2 Like Inv Bonds
3 Pay tax free on care benefits

Question 7

Ingenious Care Plan. What are main features?

Answer 7

1 Suitable for those with estate liable to IHT and have lump sum who have an upper medium ATR and cap for loss.
2 May need care in next 5 years
3 Has 1-6 month redemption period
4 Min £50K
Must be held for 2 years qual BPR
5 If care required withdraw monthly installment upto max amount £100K or 25% of inv if lower
6 Grace Consulting
7 Upper ATR
8 Net return 3-5%

Question 8

Immediate Care Annuities (INA) key features of this post funding arrangement?

Answer 8

1 pay direct to nursing home otherwise taxed as PLA
2 Choose
IEscalation
capital protection -some via Dec Term or WOL

Question 9

Describe Deferred Care Plans

Answer 9

1) Paid after period 1 to 5 years
2) No capital protection
3. Can index link/Escalate
4 Benefit after failing 1 ADL

Question 10

Outline the 6 Activities of daily Living?

Answer 10

1 Washing - Ability wash in bath or shower (inc going in and out)
2 Dressing - Put on and take off, secure, fasten clothing,
3 Mobility to move indoors from room to room
4 Transfer Ability to move from bed to upright position
5 Feeding Ability to feed oneself
6 Toileting. Ability to use lavatory

Cognitive or Mental Impairment - using standard tests. Cognitive impairment would be result of Alzheimer’s. Significant loss of intellectual ability from an organic cause . Mini Mental State Examination is one test

Question 11

Who is Equity Release suitable

Answer 11

1 Last Option
2 Most likely for domiciliary care in clients own home
3. single and entering care home and family do not want to sell home
4 Those over 55-60

Question 12

2 main Types of Equity Release

Answer 12

Lifetime Mortgage

Home Reversion plans

Question 13

What are main features of Lifetime Mortgage?

Answer 13

1 Mortgage on house
2 Still Retain House
3 Min age 55 to 60
4 Lump Sum or draw facility
5 LTV 25-55%
6 Can have roll up option

Question 14

What are main features of Home Reversion Plan?

Answer 14

1 Sell all/part of home
2 Right to live
3 May have restrictions of what can be done to property

Question 15

State Principles of Equity Release Council (formally SHIP)

Answer 15

1) Remain in Property
2) Clearly explained
3 solicitor dealing needs to sign certificate conforming
4 no negative equity guarantee