Mary case study
This case study looks at how a Lifetime Care Plan can help Mary fund her care.
Mary is 90, widowed and lives in Norfolk. She has dementia and a heart condition. Her husband passed away a number of years ago but she has two daughters who live locally, they support her with regular visits and help around the home.
Mary’s family have recently become increasingly concerned with her ability to cope in her own home so made the decision to move Mary into a care home in the local area.
When Mary was first diagnosed with dementia she set up a Lasting Power of Attorney for her health, welfare, property and financial affairs. So her daughters are now able to manage her affairs for her.
Mary is not eligible for any assistance from the state and will have to pay for her own care.
|Mary's assets||Expected outgoings|
Annual income from State Pension and Attendance Allowance benefit: £11,276
Mary has found a care home that she likes near to her family that costs £40,000 a year.
Mary would like to have a weekly allowance of around £65 to £70 to pay for treats and personal expenses.
Please note this example is not real, it is for illustration purposes only.
Based on Mary’s circumstances, her financial adviser suggests that Mary’s annual State Pension and benefits income will cover £11,276 of her annual care home costs. The shortfall could be covered by selling Mary’s home, and in exchange for an upfront premium of £96,600 a Lifetime Care Plan could pay £32,200 a year to the care home for the rest of her life. Her adviser included approximately £3,500 a year within the calculation to cover any personal expenses. Her daughters decide to ask the adviser to invest the money left over from the sale of Mary’s house.
Buying a Lifetime Care Plan is a once and for all decision. Your client can buy one with us or another provider and by shopping around they may be able to get a better deal.
Peace of mind that a guaranteed amount of her care home costs will be paid each month until Mary dies.
In three years Mary will have recouped the initial amount she paid for her Lifetime Care Plan.
Under current tax legislation, no income tax should be due on payments we make to a UK registered care provider.
Reassurance for Mary’s family that she is in a care home with access to the support and facilities she needs.
As our Lifetime Care Plan provides a Guaranteed Premium Protection for the first six months, a proportion of the fund would be returned to Mary’s estate in the event of premature death in the first six months, less any payments we’ve already made.
Premature death in month
% of premium returned
(less care costs to date)
(less care costs to date)
|2 to 3||50%||£48,300|
|4 to 6||25%||£24,150|
Actual payments from the Guaranteed Premium Protection will depend on individual circumstances. Any amount paid to a client's estate may be subject to inheritance tax.
When meeting a financial adviser they would tell Mary and her family about the risks involved with the product:
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