Care home annuities

OldMusicGuy

Ibrahim5 said:

Taking out an annuity at age 95 with a break even of 99.5 is absolutely bonkers. You were absolutely fleeced and are happy about it! What age did you think they were going to live to?

We weren't fleeced. My FiL and his children made an informed decision. You might make a different one. As you saw in LHW99's post, there was a chance he could go beyond 100, and once beyond that point his capital would start going down quite quickly (especially as care home fees increase rapidly and his money was not invested anywhere). He was in good health for a 95 year old when we took out the annuity. 

The beneficiaries of his estate have no regrets about what they did because of the security it gave him while he was alive. The bigger issue was the large loss they made on the sale of his retirement flat, which was really difficult to sell.   

OldMusicGuy

Ibrahim5 said:

Care homes should carry a government warning. They are bad for your health and your wealth. The 'resulting adjustment ' is not small. This is the problem. Statistic professionals fleecing people, helped by IFAs who are skilled at giving everyone a good haircut all in the name of "peace of mind".

No one forces you to go into a care home. If you don't like them (and you clearly don't), best of luck looking after your aging parent(s) at home.......

wjr4

OldMusicGuy said:

Ibrahim5 said:

Taking out an annuity at age 95 with a break even of 99.5 is absolutely bonkers. You were absolutely fleeced and are happy about it! What age did you think they were going to live to?

We weren't fleeced. My FiL and his children made an informed decision. You might make a different one. As you saw in LHW99's post, there was a chance he could go beyond 100, and once beyond that point his capital would start going down quite quickly (especially as care home fees increase rapidly and his money was not invested anywhere). He was in good health for a 95 year old when we took out the annuity. 

The beneficiaries of his estate have no regrets about what they did because of the security it gave him while he was alive. The bigger issue was the large loss they made on the sale of his retirement flat, which was really difficult to sell.   

Ignore them, their comments are always useless! 

Ibrahim5

LHW99 said:

MeteredOut said:

LHW99 said:

Ibrahim5 said:

Taking out an annuity at age 95 with a break even of 99.5 is absolutely bonkers. You were absolutely fleeced and are happy about it! What age did you think they were going to live to?

When already at 95, he has a 25% chance of living to 99, and better than 16% chance of living to 100

Not bad odds

https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/articles/lifeexpectancycalculator/2019-06-07

Would be interesting to see those stats adjusted for people who live in care homes.

True.

One might argue that those in care homes are more frail, so may have a lower life expectancy.

On the other hand, in a care home they would have regular meals (and other care), and medications given on time, which would tend to prolong survival

Perhaps in the end, the resulting adjustment would be small.

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/articles/lifeexpectancyincarehomesenglandandwales/2011to2012

The difference in life expectancy between those in care homes and those who aren't is enormous.