What is the Partnership Long Term Care Plan Payment Option?

Most individuals who learn that they may need term care have a bit of time to let the news sink in for both themselves and their families. This allows them a period of time for them and their family to adjust to the varied changes that are sure to come their way. Long Term Care is often needed as the result of a crisis. This could include something like a fall or illness. In these instances, there are a number of decisions that may need to be made in a relatively short period of time. For those who know that they will receive some financial assistance from their local authority or even for those who have already had their means assessment performed and know that they fall within the threshold to receive assistance, at least the worry of paying for care is eliminated early. However, for someone who doesn’t yet know how much their care may cost them or worse, for someone who is assessed as being a self- funder, not only do they have to grapple with the idea that they need care but they also need to consider their options for paying for that care. And it is no secret that long term care can be incredibly expensive, especially as of late. Although they may have assets in excess of the means test limit which is currently £23,250 it is often the result of the value they hold in their property. So, for those who own a home and know that they need care, it is their property that is most likely causing them to exceed this threshold.

If you are one of these self-funders and you own your home, there are ways to make your property work for you. In fact, it can essentially help you pay for your care. Doing so is considering using the Care Plan Payment Option from Partnership. This plan has been designed to release some of the equity within your home to purchase a Care Plan which is functions as an immediate needs annuity. These plans are a type of annuity contract, which is essentially an insurance policy that guarantees you a regular income in exchange for a lump sum payment upfront. Once that initial lump sum investment is made, the annuity provides a guaranteed income for your entire life in order to cover the costs of the care you need. This money you receive will essentially function as a way to bridge the gap between your care costs and the money that you have available to pay for those services.

This type of annuity is fully underwritten on your age, medical history and life expectancy. That means that the price of your care plan depends on how much you need and how long you will most likely need to receive payments. The funds released from your home will be used to pay for the annuity which will provide a guaranteed income for the rest of your life to pay for your care. Options can be included within the plan to ensure that the income will escalate to cover increasing costs of care. Providing the income from this plan is paid directly to a registered care provider the payments will be made tax free. There are several factors that will determine how much you will have to pay upfront in your lump sum payment. These factors include things like how much income you will need to cover costs, current annuity rates, how long you are expected to live, the state of your health, and your age. All of these impact how long will you need money which in turn determines how much the insurance carrier will need to pay out to you over the course of the annuity.

The Care Plan Payment Option is available to those who are aged 80 and over, providing that the property is a suitable source of security for the loan. Once that initial lump sum payment is made, there are no other payments that are required to maintain the loan. This is because the interest will be added to the capital sum and will be paid off in full on the eventual sale of the property.

One of the benefits of this scheme is that the property does not need to be sold immediately and can therefore be rented out to produce income which can be used towards the cost of care which means that a lower annuity income could be required. This kind of annuity is a great option for anyone who owns their home and whose asset and income levels disqualify them for help from their local authority. It allows these individuals to stay in the comfort of their home while also being able to finance the care that they need.