Ideas
Whether you are reviewing and setting your annual sales and marketing plan, or if you.
Ideas
Whether you are reviewing and setting your annual sales and marketing plan, or if you.
Ideas
Whether you are reviewing and setting your annual sales and marketing plan, or if you.
Later life illnesses such as dementia, Alzheimer’s and Parkinson’s are a growing worry for millions, but so far it has been almost impossible to buy insurance cover
for them. An earlier form of cover, known as long-term care, sold poorly because few people were willing to insure themselves against nursing home costs they may
never incur.
Social care is a growing worry as dementia becomes widespread, but the state will only cover all your costs once your assets, including your home, have been almost
depleted. Almost two thirds of us are worried about the financial impact, according to research from insurer Vitality Life, which has been working on a solution.
Standard critical illness cover policies pay a tax-free cash lump sum if you suffer from one of a list of serious health conditions such as cancer, heart attack or stroke.
Deborah Stone, author of The Essential Family Guide to Caring for Older People, said that while some also cover dementia and Alzheimer’s, most only pay if you contract
it before age 60 or 70, when these policies typically expire: “Given that dementia rarely surfaces by that age, this
is not helpful.”
Last year, Vitality Life added an optional extra to its Serious Illness Cover called Dementia and Frail Care Cover, offering ongoing cover for care costs arising from
later life illnesses. The original plan stops at a maximum age of 70, but members who select the optional extra at outset and keep up their premiums, get ongoing
protection against dementia and other later life illnesses. The plan will pay up to 50 per cent of the original benefit, depending on the severity of the deterioration. This is
capped at a maximum £100,000, the average cost of care for a dementia sufferer, according to the Alzheimer’s Society. Vitality Life has now launched an enhanced
version called Dementia and Frail Care Cover Plus, which boosts cover up to 100 per cent of the original policy benefit, in return for an additional premium. It also gives
access to a telephone-based care advice service, and a care sourcing platform with vetted providers.
This kind of protection is typically sold through financial advisers and Emma Walker, chief marketing officer at protection broker Life Search, welcomed the move: “Vitality
Life’s plan lets you extend your cover into later life without reapplying or being underwritten again.”
Quilter tax and financial planning expert Rachel Griffin said as with any insurance policy, read the small print carefully to understand exactly when it will pay out. Other
funding options include paying more into a pension while working, to cover later care costs: “Otherwise the equity in your home can provide a lump sum or regular
income.” Some should consider a single premium life assurance policy, as this will typically be excluded from your local authority’s care costs means test, Griffin added. If
going into a home, you could buy an immediate needs annuity or care plan, which pays a guaranteed income for life to help cover your care fees in exchange for a
one-off lump sum.
Stone recommended talking to a financial adviser who specialises in later life issues: “Don’t leave it too late.”
By Harvey Jones
