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Lifetime Care Plan
We know making decisions around later life care can be a really difficult time for your clients and this often means they'll ask more of you than just financial advice.
Beyond your caring conversations with your clients, we want to provide the right support for you so you can focus on your clients and help them make the best decisions for them and their family.
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What is a Lifetime Care Plan?
In exchange for a single premium, our Lifetime Care Plan, an immediate needs annuity, provides a guaranteed monthly payment for life to help pay for your client's care fees. A Lifetime Care Plan can mitigate the risk of ongoing care home fees eroding a client's assets, providing security and peace of mind to your client and their family.
Payments can be made to a maximum of two UK registered care providers, if your client is receiving care from more than one provider.
Under current legislation no income tax should be due on payments to UK registered care providers. The rules governing tax may change in the future and affect your client’s income and capital.
If, after your client's plan is set up, their situation changes and they're no longer in receipt of care from a UK registered care provider, the payments can be paid directly to your client instead, however these payments will be subject to income tax.
The plan doesn't guarantee to cover the entire cost of care and your client's care costs may increase over time. Your client is responsible for funding any shortfall and may need to fund their additional care costs from other sources.
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Who is it for?
A Lifetime Care Plan may be suitable for clients who:
- Are over 60 years of age when they apply.
- Are currently receiving care, or will need care when the plan starts, which is expected to be permanent until they die.
- Want a regular payment for life to help meet care costs.
- Have/will have care provided by a UK registered care provider and care is provided in their own home or in a care home.
If your client no longer requires care, or becomes eligible for state benefits, they can’t cancel their plan and the monthly payments will be made directly to them.
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Payment options
Your client can choose either a fixed payment that does not change throughout the duration of the plan, or a payment that increases each year:
- by a fixed percentage – anything up to and including 8% (in whole numbers); or
- in line with the Retail Price Index (RPI). If your client selects this option, they'll be unable to select the Additional Payment Protection option (see death benefits tab).
Any payments we make directly to your client or anyone other than a UK registered care provider are subject to income tax.
The care provider may continue to charge fees even after your client dies but the payments from us will stop from the date of their death.
Receiving payments from a Lifetime Care Plan may affect your client’s ability to claim for means-tested state benefits.
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Death benefits
Our Lifetime Care Plan offers the following death benefits:
- Guaranteed Premium Protection: This benefit is automatically included in your client's plan. It means that if they die within the first six months of the plan, we’ll pay their estate a percentage of their original premium less any payments that we’ve already made.
- Additional Premium Protection: Your client can choose to protect a percentage of their original premium for more than the first six months of their plan. When they die we'll pay their estate the percentage they've protected, less any payments we've already made.
The total amount of monthly payments we make, plus any payment we make to your client's estate from the Guaranteed Premium Protection or Additional Premium Protection, may be less than the original premium paid for the plan (excluding COVID-19 Guaranteed Premium Protection).
The details of the Guaranteed Premium Protection and Additional Premium Protection can be found in the Lifetime Care Plan Key Features PDFsize:1.5MB.
In response to COVID-19, we introduced the benefit of COVID-19 Guaranteed Premium Protection. This applies to all clients who purchased a Lifetime Care Plan policy between 1 March 2020 and 30 June 2021.
For qualifying clients, we'll pay back 100% of the total premium less any payments made, if COVID-191 is the cause or contributing factor of your client’s death and is stated as such on the death certificate. Subject to the applicable terms and conditions, the guarantee applies where death occurs within the first 12 months after the policy begins.
Further information on the COVID-19 Guaranteed Premium Protection can be found in the Addendum to the Terms and Conditions PDFsize:99KB.
Key documents
How to get a quote
Find out more about our process and how to get a quote for our Lifetime Care Plan.
Our team are here to support you
Our dedicated team of account managers are here to get to know you, provide ongoing support and help you to grow your business.
Read our case studies
We’ve created two case studies to show how a Lifetime Care Plan can help your clients.