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You can’t buy long-term care insurance, but find out what these policies covered and how they worked.
Long-term care insurance used to pay out a regular amount to cover the cost of your nursing home fees or for at-home care should you need it due to old age or disability.
They were sold on a case-by-case basis, so each policy was tailored to the individual circumstances.
Long-term care insurance isn’t commonly sold any more but there are policies that can help with the costs of later life.
There are two types of long-term care policies:
These plans were useful if you didn’t already have long-term care insurance and needed care straight away. You paid the insurer a lump sum to buy the policy which would then make regular payments for the care you received.
With this type of plan, you pay the insurer a lump sum or regular premium and the policy would pay out if you needed long-term care in the future.
The cost of long-term care varies depending on where you live, the type of care you need and the care provider.
According to carehome.co.uk, the average monthly cost for residential care is £2,816 and £3,552 for a place in a nursing care home. If you need specialist care, say for a certain medical condition, it’s likely to cost more.
You might be able to apply for long-term care from your local authority or through NHS Continuing Healthcare.
You could be eligible to claim Personal Independence Payment (PIP) and/or Attendance Allowance to help with at-home care costs.
You may need to use your savings and pension to help pay for any long-term care you need.
You might even have the option of releasing equity (money) from your home to help cover the cost.
You’ll be means tested with a financial assessment to determine what you need to contribute from savings and assets.
There are still some long-term care or ‘lifetime’ plans available that offer similar benefits, but not through mainstream insurers.
If you’re looking for advice on how you could pay for potential long-term care, speak to an independent financial adviser. An organisation like the Society of Later Life Advisers (SOLLA) may be able to help.
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