Secured Lifetime Care

The Secured Lifetime Care plan can help if your client has the financial resources to pay care fees, but would like to limit their financial liability. It can be appropriate if they’re suffering from physical or mental disability and either already receiving care or about to start receiving it.

Clients must be aged 60 or over and be receiving care because they need assistance with everyday tasks, or need constant supervision due to conditions such as dementia.

 

Benefits and options

As long as your client is receiving care, we’ll start paying the long-term care benefit at the end of their chosen deferred period. This can be 1, 2, 3, 4 or 5 years from the date the plan starts.

The maximum benefit is £8,000 per month. The minimum benefit is £200 a month. We can increase the benefits before the end of the deferred period, but we would consider the individual's health before confirming the terms. There are no policy exclusions on the benefits.

There is no surrender value either before or after the benefits become payable.

 

Payments and legal representation

The plan is set up by paying one single premium - minimum £5,000. If your client is unable to handle their own affairs, a legal representative can act on their behalf.

 

Inflation protection

If they’d like to, your client can help protect their benefits from inflation by choosing one of the following options before the plan starts:

• Yearly increases in benefit at a fixed rate between 3% and 10% compound each year (whole numbers must be chosen)
• Yearly increases in line with the Retail Prices Index
• Yearly increases of 2% more than the increase in the Retail Prices Index

Your client can also choose in which month the annual increase takes place, to fit in with their arrangement with their care provider. The increased amount applies for the full month in which the benefit goes up. We will make the increased payments automatically. Your client can also choose a level benefit plan.

The Secured Lifetime Care plan is designed for clients who:

• Are suffering from a physical or mental disability and are currently receiving or are about to receive care
• Want the peace of mind that all or part of their care costs are covered for the rest of their life
• Can pay some of their care costs themselves and would like to defer payments at the start of the plan
• Want their benefits paid tax-free direct to a registered care provider
• Would like the option of annual increases to their benefits at an additional cost, helping to protect those benefits against inflation

It’s unlikely to be suitable for:

• Client who aren’t yet ready to enter long-term care
• Those who require a guaranteed payment to be left to their estate upon death
• Clients who don’t have other means of paying their care costs during the deferred period
• Clients unable to make up any shortfall in care costs over and above the monthly benefit

Things to consider

• Will the plan cover your client’s monthly care costs?
• Does your client have the means to make up any shortfall in care costs?
• Will the payments from the plan affect your client’s entitlement to any state benefits?
• Is your client aware that the total benefits paid may be less than the amount used to buy the plan?
• Does your client have any tax liabilities to address?
• Is your client aware that the plan has no cash-in value?

Possible alternatives to a lifetime care plan include:

• Local authority deferred payment scheme
• Equity release
• Investments or cash deposits