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As
medical science continues to advance, people are living longer.
However, longer does not necessarily mean healthier. Caring
for the elderly and infirm doesn't come cheap. And if you
believe the State will provide, then, especially if you are
a home owner, think again.
Although the Government does offer some
help towards the costs of long-term care (LTC), this is aimed
mainly at people of limited means. |
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Keeping
your assets
Selling the family home, mortgaging it to the local authority or
digging into savings and investments to meet the costs of care can
turn a lifetime's planning upside down. The inheritance that was
intended for your children and grandchildren can all too quickly
disappear. But it does not have to be like this. The role of LTC
insurance is to provide the means to meet all or a large part of
the bill for fees, leaving most of your assets intact.
Immediate needs
There are two main types of plan. The first of these is designed
for those whose physical or mental condition is such that they need
care immediately. The big question is: For how long? An 'immediate
needs' plan provides the means for an elderly and infirm individual
and their family to exchange this uncertainty for the guarantee
that an insurance company can provide. For a set lump sum investment,
the insurer guarantees to pay a regular income for the remainder
of the person's life, no matter how long this may be. In calculating
these payments, the insurance company will take into account the
individual's state of health and its likely effect on longevity,
as well as their age.
The payments may be made by the insurer direct to the care provider
so they avoid income tax.
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Starting
early
The second type of LTC insurance plan is designed to start
much earlier - long before any need for care is expected to
arise. Users of this type of plan can choose to pay either
regular monthly or annual premiums or a lump sum.
The insurer will typically pay out a regular income for any
individual who is unable to carry out two or three of six
named 'activities' of daily living - these include washing,
bathing and dressing - without the assistance of someone else.
The regular income payments may be made to the policyholder
direct if they prefer to be cared for in the familiar surroundings
of their own home, to someone acting for them or to a care
provider. In all these instances, there should be no personal
tax to pay. |
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If
long-term care provision is an area that you would like
to investigate further, we can provide you with complete
unbiased advice based on your specific requirements. Please
e-mail or contact us. |
| The
Financial Services Authority does not regulate some forms
of Long Term Care products. |
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