Insurers are predicting the market for immediate lifetime care products is set to boom, with BUPA the latest health insurer to enter this sector.
Brian Riley, general manager for the personal sector at BUPA, has disclosed that an immediate care plan has been in development for over 12 months.
“We have a product ready to go. All we are waiting for is Inland Revenue approval which could come any day. All the documentation is ready. And we have brokers who want to sell it,” said Riley.
The upsurge in the fortunes of the immediate care market had been predicted by PPP Healthcare earlier this year. It has witnessed an 11% increase in premium income since the 1995 launch of its immediate lifetime care scheme, and is confident this will grow.
Immediate long term care policies have traditionally been a hard sell. The cost of paying a single premium has proved prohibitive for many elderly people. Recent statistics from the ABI show that the average price is over £40,000.
But this one-off payment can prove cheaper than paying annually for nursing care costs. It is estimated that residential care homes costs £17,000 a year, with care in the home for elderly people costing a staggering £30,000 a year. Estimates indicate that one house is sold every 15 minutes to finance long term care bills.
Riley said: “Some 80% of BUPA nursing homes had residents paying for care out of their own pocket. We had a lot of enquiries about insurance but nothing to offer.
“This prompted the development of an immediate long term care plan. We think this policy will take off once the public realise no one will look after them in old age.”
But not everyone is convinced by such optimism. Peter Selby, an IFA and research manager with Brookridge Services Associates, Croydon, believes that long term care needs long term thinking.
“The people who want this product most may not necessarily be able to buy it. Care in retirement should be planned for and many people may prefer to keep control of their assets,” he said.