Planning for Care

bostonerimus

This is the second long term care posting recently and I get the feeling this is going to become a bigger and bigger issue. Financing potentially high care costs for an indefinite time from retirement savings isn't the right solution. I'd like to see some insurance products tailored to pay for care. Take them out early enough and the costs would be reasonable.

kidmugsy

bostonerimus wrote: »

. I'd like to see some insurance products tailored to pay for care. Take them out early enough and the costs would be reasonable.

Firms tried but couldn't make a living at it. I suspect that many people feel "sod it, let the taxpayer cough up".

bigadaj

kidmugsy wrote: »

Firms tried but couldn't make a living at it. I suspect that many people feel "sod it, let the taxpayer cough up".

It was supposedly part of the whole care review a couple of years ago.

Capping care costs, I think £85k was mentioned, would then allow insurers to provide products that capped their liability.

There has to be a solution based on likely life expectancy which wouldn't actually costs the government too much.

bostonerimus

With LTAs and NHS stepping away from long term care there needs to be an efficient and reasonably priced private insurance market. Of course that will require lots of people to sign up to make it work. The situation really reminds me of the disaster that is US private health insurance where premiums are so high because many young and healthy people simply don't bother to buy insurance. My solution would be 0.5% (say) on NI to provide elder care for everyone that wants it, but that's not going to fly today.

But back to the OPs issue. It's really the difficult job of juggling life expectancy, costs and whether an annuity of something like a short term bond or savings bond ladder will provide the right income stream. I simply don't like the idea of equities when you can't really reduced spending if there's a market crash.

bostonerimus

bigadaj wrote: »

It was supposedly part of the whole care review a couple of years ago.

Capping care costs, I think £85k was mentioned, would then allow insurers to provide products that capped their liability.

There has to be a solution based on likely life expectancy which wouldn't actually costs the government too much.

The LTC insurance market in the US is also having a tough time. I bought a plan in my mid 30s that will pay out $200/day with a lifetime max of $350k, but the company stopped issuing new policies at least a decade ago because it wasn't making money. Another approach is to buy a deferred annuity.

elsien

Is he claiming attendance allowance? It's not a huge amount but it's not means tested and would pay for a few hours help as a starting point.