After it is determined that you or your loved one needs or will need long term care, it is important to look at every option available to help you pay for that care. With what seems to be an increasing price tag associated with care costs, it is important to ensure that you at least entertain each option, especially as it pertains to your individual financial situation. No two financial perspectives are the same and depending on your choices, you may be able to manipulate your assets and capital in order to ensure that you receive the best care possible. One of these potential options is the Long Term Care Plan. This is also referred to as an Immediate Needs Annuity and works for many individuals who are looking at using creative ways to pay for their long term care needs.
These plans are annuities that are specifically designed to cover your care costs for the rest of your life. You make a one-time lump sum payment to the insurance provider in exchange for guaranteed payments for the entire time that you need care. The payments only expire once you have passed or your care needs have expired. Because each case is underwritten on an individual basis the providers will seek a report from your GP and the residential or nursing home in which you are a resident. The amount of your lump sum payment will depend quite heavily on your individual characteristics including your age, overall health condition, amount of time you are expected to need care, and how long you are expected to live. This helps the insurer determine exactly how long they will need to make payments and thus, will allow them to quote you an appropriate amount for your lump sum payment.
In order to streamline the request for the reports from your GP or care setting, the request will be made through an agency called medicals direct. This will ensure that all companies quoting your potential long term care plan are doing so by using the same information. Because your doctor has a window of time to send back the report it often takes anywhere from 4 to 6 weeks for the report to be forwarded to the potential providers. However, despite the time lapse, using a streamlined process can help ensure that you are getting quotes that are accurate and reliable. It also gives you the information needed to make the best decision for your particular situation.
There are currently only two companies offering this type of payment scheme. They are Partnership and Friends Life who are both the sole representatives in the long term care insurance market. Each of these providers offers similar schemes and there are several individuals who benefit greatly from investing in this kind of care plan. There are some additional safeguards that can be put into place within each individual scheme. For example, these schemes can be set up to include an escalation option either to a fixed rate or RPI. By the inclusion of escalation you have a better chance of being able to cope with increases in the cost of your care fees. Including the potential for escalation can be incredibly important if you anticipate that you will need care for a long time or for the rest of your life. It seems that costs associated with long term care continue to increase. That being said, by factoring in escalation, you never have to worry that your costs will go up and you will have to make up the difference.
There are some other options that can be included in purchasing this kind of care plan as well. One of these options is capital protection which aims to pay back a lump sum less any payments made if you were to die shortly after taking out a plan. The inclusion of this particular provision will usually have a major impact upon the price of your Long Term Care Plan. Partnership includes short term protection as standard within their scheme. This serves to guarantee that if you die in the first month following the purchase of your long term care plan, 100% of your premium less any payments made would be paid to your beneficiaries. This benefit reduces to 50% of the premium less any payments made in months 2-3 and 25% if death occurs in months 4-6. The scheme with Friends Life will also allow this short term protection. However, with Friends Life, this kind of protection is optional and would come with an additional cost.