Long Term Care

This is essentially care you need for the foreseeable future, maybe as a result of an illness or old age. As you get older, you may develop health problems that may make it difficult for you to deal with everyday tasks and as such may need some form of additional care - this may involve someone coming to your home for a few hours each week or in more extreme cases moving into long term care for round the clock care.

The state may provide some help towards this care depending on your circumstances. There are other ways to fund for this care including utilising your savings and investments.

There is another option and that is called Long Term Care Insurance (LTCI) and there are 2 types:

• Immediate Care LTCI
• Pre-funded LTCI

Immediate Care LTCI

You buy an immediate care LTCI when you have been medically assessed as needing care. This can be done at any age. It works by buying an immediate care plan with a lump sum which then pays out a regular income for the rest of your life to pay for your care.

Pre-funded LTCI

You can buy pre-funded care in case you need care in the future. You can buy it any any age, but some providers have restrictions. It works by taking out an insurance policy which will then provide a regular income to pay for care should you ever need it. It pays out if you are no longer able to perform a number of activities of daily living such as washing, dressing or feeding yourself without help, or if you become mentally incapacitated.

You pay either regular monthly premiums or a single lump sum premium. In either case, the insurance company usually reviews the plan, say every five years, and the premiums may then rise – even if you've bought a single premium policy. Premiums depend on your age, sex and the amount of cover you choose.

This section is intended to provide a summary of Long Term Care Insurance and is not designed to provide any advice. This is a very intricate area of financial planning and you should ensure that you speak to a specialist in this field and obtain all the facts for your circumstances before entering into any arrangement.