Norwich Union has introduced the future assured plan, a future needs long-term care plan that has three levels of cover.
Benefit is paid if the policyholder cannot perform at least one of six activities of daily living (ADLs). These are washing, dressing, feeding, going to the toilet, mobility and transferring, for example, from a bed to a chair.
Blue is the lowest level of cover, silver is mid-range and gold is the highest level of cover. Upon failure of one ADL, all levels pay out independent living benefit. This is a cash payment to buy a piece of equipment such as a stair lift, which makes it easier for the elderly person to live independently.
If the policyholder cannot perform two ADLs, they receive no payment under the blue option, half the monthly care benefit with the silver option and all the monthly care benefit with the gold option. The inability to perform two or more ADLs results in a payment of all the monthly care benefit with all level of cover. Mental impairment also results in full payment.
PPP Lifetime Care's lifetime care plan is a similar future needs plan that has also has three levels of cover. However, it compares unfavourably to Norwich Union's plan in that policyholders get nothing if they cannot perform just one ADL. Instead, payments are made upon the failure of two or three ADLs, depending on the level of cover taken out.
A 65-year-old female requiring annual benefit of £12,000 on an index-linked basis would pay £58.94 a month for the lowest level of cover with Norwich Union and £68.48 a month with PPP Lifetime Care.