Assisted Living Insurance is described as being the industry’s first product specifically aimed at supporting older people to extend independent living in their own home in later life. In effect the policy operates as a whole of life plan.
Customers can choose between two initial levels of maximum cover – £20,000 or £30,000, which increases each year, to help offset the effects of inflation. The policy provides funding for assisted living, including:
- Assisted Living Allowance, which provides professional care services (nursing, domiciliary or therapy) delivered in the customer’s home. This pays up to £1,000 a month.
- Respite Care Allowance. This pays up to £2,000 should a policyholder have an unpaid carer who needs to take a short break.
- Assistive Devices Allowance. This pays up to £10,000 for equipment such as a stair lift or wheelchair ramps to enable the customer to carry out certain activities of daily living.
- Also covered under that heading is modifications to the home to fit or accommodate the equipment, such as widening of doorways to accommodate a wheelchair.
- A Care Advice Benefit. This gives telephone access to care advisers to help policyholders make care decisions appropriate to their circumstances. This can be accessed either by the policyholder or the second contact on their policy to provide invaluable advice at difficult times.
When setting up the policy, policyholders can also choose when their claims start to be paid, which can either be 6 or 13 weeks from when the policyholder qualifies for the benefits. National Friendly says benefits will rise each year and estimates premiums will increase by 2% a year, but that is not guaranteed. In addition, an annual policy review could see premiums rise or fall, based on likely future claims and a range of other factors.
The plan is available to UK residents aged 50-75 at the start.
What They Say
Head of sales and marketing, Wayne Carter said: "Maintaining our independence in old age is a key concern for many of us. Certain activities we take for granted, such as walking up the stairs, can become a struggle in older age, yet the cost of adapting your home or having care in place to support you can be prohibitive. At National Friendly, we are delighted to have launched an industry-first product that aims to support people in later life, so that they can continue to live independently in their own home.
"As the number of people living longer continues to grow, it is important and appropriate that the insurance industry responds to this changing demographic. National Friendly’s Assisted Living Insurance is an innovative product that seeks to supplement local social care provision by helping individuals to manage the costs of care and adapt their homes. This could help them to carry on living independently in the future. We are proud of this product which fits our vision to be a forward thinking and trusted mutual that meets the health, welfare and protection needs of its customers."
What We Say
"The industry has been cautious in launching new products to meet the ever-growing need for more financial and other help if care is needed in old age. To date, most of the activity has been around later life plans which in effect combine whole of life insurance with a CI style lump sum care benefit.
"National Friendly has taken a different approach and is indeed building a reputation for fresh thinking. In this case, it recognises most people will (at least initially) want care in their own home rather than in a care home. So it has developed a package of benefits to not just help fund that but also to provide invaluable care (and if you have ever had to deal with an older person needing care you’ll know how priceless such advice can be).
"The financial benefits are simple – helping pay for care, giving your carer a respite and paying for assistive devices in the home. Cover goes up each year too (so do premiums) with annual reviews helping the insurer balance its assets and liabilities. The downside of that is premium uncertainty – premiums could go up (and will, by an estimated 2% a year anyway) but the catastrophe risk looks small. For mutual especially, such a mechanism is also arguably fairer on all members. One other downside is that though most people prefer care at home, they may choose or need to move to care in a care home at some stage.
"Back in the 1990s long-term care plans were the next big thing. They weren’t, and insurers went away to lick their financial (and in some cases reputational too) wounds. But there is a crying need for more help so let’s hope National Friendly can excite not just potential customers but advisers too.