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.
Our Lifetime Care Plan, an immediate needs annuity, provides a guaranteed monthly payment for life to help pay for your clients’ care home fees. As well as providing security and peace of mind to your clients and their families, it may reduce the risk of eroding remaining or family assets from ongoing care home costs, helping to preserve an inheritance for future generations.
How does it work?
In exchange for a single premium, our Lifetime Care Plan pays a monthly payment to your client’s UK registered care provider for the rest of their life.
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.
Your client can choose to receive the payments themselves, but these payments are subject to income tax.
Who's 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 is provided in their own home or in a care home.
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 benefit option).
Death benefit options
Our Lifetime Care Plan offers these types of death benefit options:
- 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 details of both can be found in the PDF file: Lifetime Care Plan Key Features Q0057792 PDF size: 1.5MB
There are risks to your client too. They include:
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.
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.
If your client no longer requires care, or becomes eligible for state benefits, they can’t cancel their plan.
While no income tax should be due on payments we make to your client’s UK registered care provider under current law, the rules governing tax may change in the future and affect your client’s income.
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.