For those already in a care home, one funding option which could be considered is an Immediate Care Fees Plan. The plan is a contract between the resident of the care home and an insurance company that guarantees to pay a series of regular payments in return for a non-refundable one-off lump sum.
The amount of lump sum needed to purchase the plan will depend on the resident’s age and state of health, the income required and whether or not this needs to increase over time, but also depends on any capital guarantees as may be selected.
The benefit of the plan is that it provides certainty as to how much capital will be used to meet care home fees, and therefore certainty as to how much capital will be left as inheritance.
The potential disadvantage of the plan are that it can be expensive (but then again, so are care home fees!), the premium paid may not be enough to cover all costs of care at the commencement of the plan or as time passes, and there is no cash-in value to the plan.
The resident could therefore pay for the plan and die soon after, leaving nothing to their estate, unless premium protection has been selected at the commencement of the plan.
Independent financial advice must be sought before proceeding with such a plan. Details of suitably qualified IFSs can be provided on request. For more information, please contact us on 01733 888888 or visit www.buckles-law.co.uk.
