Immediate Need and Long-Term Care
The unfortunate reality is that one in three of us will need long-term care at some point in our lives. Learning that you have to go in to care can be distressing, both for the individual involved and close family members. In that scenario, the added uncertainty of how care will be paid for is an unnecessary burden. To tackle the problem, insurance providers have developed Immediate Need or Long Term Care Annuities.
An Immediate Need annuity policy can be purchased when an elderly relative is already in either residential care or a nursing care home, or is about to be admitted. The annuity is paid directly to the care provider for the life of the individual and the Inland Revenue enables this to be paid gross (no tax on the income).
A Long-Term Care annuity is underwritten individually for each client based on his or her age, sex, health and the income required. After a medical assessment, illustrations of the lump sum required to produce the needed income can be produced. In return for a single premium, a tax-free regular income will then be offered to the care provider of your choice.
Here are the pros and cons of long-term care annuity: