8 Long-term care insurance Flashcards
When will the NHS full fund full time care?
when the primary need for care is health based
What is the lower & upper savings threshold limit to qualify for supported LTC?
The lower savings limit in England is £14250, the upper limit is £23,250
What is the tariff income for LTC?
if between the upper & lower threshold then every £250 over the lower threshold reduces the amount paid to a persons care by £1 a week
What would the local authority determine to be income when deciding whether it can assist with care fees?
- Pension income
- State benefits
- Income from investments
What would the local authority determine to be assets when deciding whether it can assist with care fees?
- Money in cash
- Shares
- Property
- ISAs
When can the value of someone’s home be disregarded when ascertaining whethet the local authority should support with care fees?
- when resident’s partner, ex-partner or relatives are living in the property – needs to be their main home
- if a family friend has moved in to care for another – value of the home is disregarded for 12 weeks from the date someone goes in to a care home
- If someone needs care in their own home then value of house disregarded, but other assets included.
What is a deferred payment plan for LTC?
If someone’s assets excluding their property are worth less than £23250 then the authority can’t force them to sell their home but can request that a charge is repaid on death, can then rent the house out to pay for care
What is deliberate deprivation with regards to LTC?
Disposing of assets delivberately for your own benefit
How can couples avoid the deliberate deprivation rule with regards to owning their home?
if couples own their home as tenants in common then the whole home could be disregarded for LTC purposes
What is sheltered housing?
sheltered housing is more like supervision in own flat in a complex
What factors can cause LTC costs to vary?
Costs can vary depending on location in UK, type of care needed & quality of the home/ additional features required
What is an immediate needs LTC plan?
If already in poor health then can buy a policy that pays for care immediately on an indefinite basis
How can someone be eligible to purchase an immediate needs annuity?
need to be unable to perform one ADL
How can immediate needs annuities policies be set up?
can index link or have level benefits which pay out
In what 2 forms can pre funded care plans be purchased?
1) Traditional Insurance
2) Investment Linked policies
What is traditional insurance for pre funded care plans?
Bought before care is needed, usually only start to pay out if insured meets predefined criteria e.g when can’t perform 3 listed ADLs
For how long will traditional insurance policies pay out for?
Until care isn’t needed anymore
How is an investment linked policy for a pre funded car eplan structured?
combined an investment bond and LTC policy, means can meet LTC costs and still have some left over for estate
How are LTC costs paid for with investment linked policies?
Premiums are drawn from the bond to meet the costs of the insurance
What is a care cash plan?
pays out set cash sum/ income for set period to cover care
Who are deferred care plans intended for?
For those who have the money to pay for care in the short term, but need insurance if the care is longer than expected
What 2 forms of equity release can help to pay for LTC fees?
1) Lifetime mortgage
2) Home reversion plan
In what 2 ways can a lifetime mortgage be structured to pay for LTC costs?
i. Interest only lifetime mortgage – Only interest is paid and full amount repaid when individual enters care home
ii. Roll up mortgages – Interest rolls up but isn’t paid until person goes in to care home, amount can grow quickly depending on interest rates
What are some disadvantages of using a lifetime mortgage to pay for LTC fees?
- Could reduce entitlement to means tested benefits
- Expensive early repayment charges
- Doesn’t provide cost for someone moving in to a care home, just helps to cover cost of having care in own home.
