Why do we need a later-life care annuity?
Too many people end up having the house they treasured and worked hard for, sold to pay for care. The inheritance they planned for their family is then drawn down on for an indefinite period. It’s not unusual for care home fees with nursing to exceed £50,000 a year, and a long spell in care can use up considerable funds.
How does it work?
A care annuity is a way of providing at least some certainty on the ultimate cost of care. Like all annuities it involves the investment of a lump sum. The size of the lump sum will be determined by the medical underwriting of the person going into care.
How do you set up a later life care annuity?
The only way this product can be purchased is through specially qualified Independent Financial Advisers (IFAs**), who have the relevant experience and training to present such an annuity as one of the options available to their client.
Conversations will often be with the extended family, and it’s not unusual for an adviser to be speaking to a relative holding Power of Attorney for the care recipient. If there’s agreement an annuity is right for their circumstances, the adviser will liaise with them to provide medical and other details on a single questionnaire involving a medical company called Medicals Direct Group (MDG).