Equity release
According to Nicky Cave, managing director of Eldercare Solutions, equity release was never a solution for funding long-term care unless it was to fund care in an individual’s own home.
“Equity release is generally not available if someone is moving out into a residential care home setting,” she adds.
“However, the local authority can lend money in those circumstances to fund a person’s care so the property could be rented out and retained during their lifetime."
Immediate needs care annuities
Ms Cave specialises in advice on immediate needs care annuities at the point of need. In other words, when a person is moving into residential care.
She feels that these solutions are all too often overlooked by advisers.
“Immediate and deferred care annuities remain very much fit for purpose, although 85 per cent of self-funders never get to hear about them and many IFAs dismiss them as ‘expensive’ in favour of investment solutions.
"Yet they are the only product to guarantee an income for life. Investment solutions can deplete in the event of longevity,” she notes.
Dementia and frail care cover
Meanwhile, VitalityLife last year introduced another new concept to the market: cover for dementia and frailty as a no initial cost add-on to its serious illness cover (SIC).
The cover starts immediately following the end of the SIC term. The benefit amount paid out is a cash lump sum equal to 50 per cent of the remaining SIC benefit amount, with a cap to the overall benefit of £100,000 (which is indexed and increases annually).
Deepak Jobanputra, deputy chief executive of VitalityLife, comments: “Our research revealed a gap in the market for a protection product that was relevant, affordable and sustainable: something you can take out earlier in life when you might have a home and family to protect, and then provide you with protection in later life and help meet the cost of any care needs.
“The launch of our dementia and frail care cover last year was one such solution that came out of this, and we have found over 70 per cent of people actively adding this product onto serious illness cover, showing the demand is obviously there and becoming more and more part of people’s consciousness."
Mr Jobanputra continues: “Encouraging positive behavioural change may help many of our members reach later life in better health and reduce their risk of diseases such as dementia, but we can’t ignore the increasing impact and cost of these conditions and frailty, more generally, in our society today.
“This offers a great opportunity for advisers to discuss later life protection needs with clients before it is too late.”
Protect wealth
As evidenced not only by the fact that we are all living longer (and generally in poor health) but also by the renewed interest from certain providers, later life protection is a growing market.
