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ScotProv claims LTC premiums will dive

Long-term care insurance premiums are to fall by up to 20 per cent following the Government&#39s decision to fund all nursing care no matter where it is provided, claims Scottish Provident.

The company estimates the costs for an individual living in a nursing home is on average £25,000 and nursing costs make up £5,000 of that figure. Therefore, if the costs of nursing are removed, the individual faces charges of £20,000 a year.

This reduces over-all premiums as consumers take out less insurance but the risk premiums will not alter as these are based on whether or not the policyholder will need care.

Industry sources say the Government&#39s decision finally removes much of the uncertainty that has held back the development of the industry. For five years, product development has been on hold because of confusion in Government policy.

Now both IFAs and product providers have an important role to play in educating the public about what is paid for by the Government and what they need to pay.

Scottish Provident product marketing manager Roger Edwards says: “The Government has provided a signpost to indicate what direction they are heading. There are still a lot of people out there who believe that the Govern-ment will pay for everything. We have to make them und-erstand the reality of the situation.”

Skandia life marketing manager Linda Cox says: “For the last two to three years, product development has been stifled. Now the Department of Health has rec-ognised the need for long-term care.”

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