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Insuring for long-term care

You can’t buy long-term care insurance, but find out what these policies covered and how they worked.

Amy Smith
Amy Smith
Updated 07 September 2021  | 3 min read

What is long-term care insurance?

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:

Immediate-care plans

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. 

Pre-funded care plans

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. 

Cost of long-term care

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. 

What other funding options do I have to cover long-term care?

State sponsored care

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. 

Self-funded care

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.

Other types of insurance

There are still some long-term care or ‘lifetime’ plans available that offer similar benefits, but not through mainstream insurers. 

Where to find help

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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