View more on these topics

Paul Bennet

Now that the final pieces of the Government&#39s long-term care jigsaw are being put into place, you will all be aware that elderly homeowners will continue to have to pick up a major part of their nursing-home costs. The Government recognises the role that long-term care insurance can play and aims to protect the consumer through Cat standards and eventually through full regulation.

It feels that these safeguards will give the public confidence to explore this form of protection. Therefore, Cat standards and even regulation should be a real benefit to sales because they will provide reassurance for the public.

So, 2001 shows significant potential for the development of the LTC market. Let us just remind ourselves of some basic facts. One in four people will need long-term care in old age. The most published statistic over the last few years is that 40,000 homes have been sold by elderly people each year to pay for care. State help with nursing costs will make a welcome contribution but a proposed means-test threshold of £18,000 will not let homeowners off the hook, with average house prices running at over £80,000.

Setting house values on one side, clients who feel they can cover the initial costs of care and, if and when their assets fall below the means-test threshold, they can leave the state to pick up the bill, need to think carefully about what this implies.

What if an elderly person in need of care has chosen a nursing home near the family, where there is a pleasant view from the window of their private room which makes their infirmity more bearable? They feel as comfortable as possible with their surroundings. Without going into detail, the nursing home of their choice is almost certainly more expensive than one which the local authority budgets for. When the money runs ou,t how are they going to fund the difference to stay in their chosen nursing home? Or will it now be necessary to move to a cheaper home?

If a couple is involved and there is no insurance, the decision to spend savings on a more expensive nursing home is a hard one to make. There is always concern about the financial welfare of the partner who is not ill and likely to survive longer. This needs to be discussed when exploring the cost implications of long-term care.

Another important sales point is that long-term care is not just about nursing-home care, as most people will want to receive care in their own home for as long as possible. Even if they receive care at home, the question you need to ask is: how will they fund those parts of life which are important to them but which suddenly become difficult? These might include looking after the garden, moving from one part of the house to another and getting around to see friends and relatives, to name just a few. All these costs mount up and cash benefits can help fund individual needs, which can make life more bearable.

The impact of care costs on an estate after a few years in a nursing home is considerable. The time to talk to clients is when they are planning or organising their retirement finances in their 50s and 60s. You can talk to them about the choices they want to make rather than dwelling on the detail of sickness in old age.

One reason why this is a market with such potential is that customers have told us they want to protect their independence as much as they want to protect their assets.

Paul Bennett is marketing manager at PPP lifetime care


Rewards on the cards

IFAs see a future for fund supermarkets working alongside face-to-face advice but they feel most UK consumers are not ready to plunge into the world of online investment on their own. Mellon Trust chief executive of fund administration Steve Blizzard recently des cribed the idea of a stand-alone supermarket as flawed, maintaining that face-to-face advice […]

Edinburgh Income & Value Trust announces results

Edinburgh Income and Value Trust, managed by Edinburgh Fund Managers, has announced that a second interim dividend of 2.4p has been declared and will be paid to shareholders on February 16, 2001. This follows a first interim dividend of 2.4p. The company intends to pay a total dividend of at least 9.6p for the year […]

In the land of the fee

This year is likely to see a general election and most people and most people believe a Labour victory is a foregone conclusion. While the election result might not change things dramatically for IFAs, the probable end of polarisation and the introduction of stakeholder pensions certainly will. Sofa vice-chairman Gary Jefferies says while IFAs will […]

Axa has the whole world in its hands

Axa Sun Life is catering for investors who have high risk profiles with the introduction of its world opportunities fund. This open ended investment company (Oeic) is also available as an individual savings account (Isa). It is actively managed and consists of 40 stocks, which are selected by the fund manager on the basis of […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm