Later-life care cover – a different way of paying for care

Later-life care cover – a different way of paying for care

We’re living longer, but not necessarily in good health. According to research carried out by the Association of British Insurers (ABI) in 2015, one in three people will need some form of care before they die. As more people live longer, a greater number of people will find themselves unable to live independently in their later years.

Care needs are unpredictable, and it’s impossible to know what, if any, care will be needed in the future. Or, indeed what the cost of this might be. While some will need to spend very little. One in ten will have serious care needs and could face costs in excess of £100,000*.

Long-term care funding is one of the major challenges we face as a society. And, there are different ways of approaching it. One of the newer solutions has been designed to take the uncertainty out of how to meet these costs if necessary while leaving a financial legacy for loved ones if care is not needed.

What is Later-life care cover?

When you take out Later-life care cover, you decide how much cover you want at the outset. This is called ‘the sum assured’, and it is the amount that would be paid out on death or diagnosis of a terminal illness. But if you can no longer live independently, the policy is designed to pay out an ‘early claim’ lump sum of up to 75% of the sum assured to help towards the cost of your care.

The maximum sum assured is £400,000; this would provide a lump sum of £300,000 if you needed to make a claim to help with care fees. You can make a ‘care claim’ if you have been assessed by a medical specialist as being unable to perform three of six everyday activities, such as washing, dressing or getting in and out of bed. You can also claim if you experience a permanent reduction in mental capacity, meaning you need supervision and the assistance of another person.

Why purchase Later-life care cover – do I really need it?

In 2017/18, the average fees for a residential care home were £32,344 per year, increasing to £44,512 if nursing care is also required. Over the last ten years, average residential care home costs have risen by 50%; if fees continue to increase at the same rate, the average cost of £32,344 will rise to £48,516 by 2028.**

Even if you choose to receive care in your own home, the average cost of home care in the independent sector is £15.52 per hour**; so just three hours a day, seven days a week, will cost £16,948 per year**.

You may not need care in the future, but could you afford to pay for it if you did?

Care and support services are not free and, unless you qualify for NHS Continuing Healthcare, you are likely to be expected to pay something towards the cost of your care the local authority will carry out a financial means test to determine what you can afford to pay, and what level of contribution they will make – if any!

Who should buy Later-life care cover?


Later-life care cover is suitable for anybody, aged between 16-84, who wants peace of mind that their care needs can be met. And who Recognise that less local authority support will be available in the future. You may still be supporting children or grandchildren, or perhaps you do not want to be a burden to your children or loved ones if you do need care.

The cost of Later-life care cover depends on your age, your health and how much cover you need. This amount is called ‘the sum assured’. The minimum premium is £8 per month, and the maximum care cover benefit is £300,000. The premium is guaranteed and will not change unless you choose to increase your level of cover.

The cover will last throughout your lifetime. If you are fortunate enough not to need care, 100% of the sum assured will be paid to your estate. Where it can provide financial protection for your family or to help with any Inheritance Tax liability.

Planning ahead will help give you choices should the need arise in later life.

* The Health Foundation, NHS and social care funding – three unavoidable challenges, May 2017
** LaingBuisson, Care of Older People UK Market Report, Twenty-Eighth Edition, May 2017

Next steps

Whilst you are welcome to get a quote online we would recommend you talk to one of our advisers.

Any quote we provide you with will take into account to your circumstances, your medical history, as well as your budget!

An online quote is just that – a quote – it isn’t a definite offer of cover. What really matters is the premium you are offered, after your application has been assessed.

Call Freephone 0800 644 4468 – Monday to Thursday from 09.00 to 19.00 and on Friday between 09.00 and 17.00.

Please feel free to read our Independent client reviews, or read about the team at Future Proof

Take a look at our handy guides ‘What Cover is Right for me?’

Do you suffer from a medical condition and concerned you can’t secure Life Insurance?  Please view our ‘Medical Guides’ for further information.

Whilst we will make every endeavour to help someone to arrange insurance, there is no guarantee of success.  All applications are subject to underwriting.

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