Mr Baker is right to consider the cost of care in a care home, but he should also think about the co...
Mr Baker is right to consider the cost of care in a care home, but he should also think about the cost of care in his own home.
It is not clear whether the weekly £575 cost has taken into account the free nursing care contribution that would be available.
If it has not, then his cost might reduce by £35, £70 or £110, but for the purposes of this exercise we will set this aside.
Mr Baker will be eligible for Attendance Allowance that would reduce his weekly cost by at least £37.65.
If he is prepared to use his total current income as part of his fee payment the residual LTCI benefit required would amount to £15,442 at today's prices.
For care at home this benefit level might not be required, but 50% (£7,721) would be reasonable when combined with current income and even modest use of savings. If Mr Baker wanted to retain some of his own income, then his benefit level and premium would increase accordingly.
A single premium for Norwich Union's Future Assured Gold Plan which would provide 100% benefit on failure of two ADLs along with an independent living benefit payment of £3,861 for assistive devices on failure of one ADL would cost Mr Baker £15,425. If he was comfortable with a 50% benefit being paid on failure of two ADLS this cost would reduce to £13,478 by selecting Silver Cover. The benefit would increase to 100% benefit if his health gets worse and he fails three ADLs.
The benefit would increase each year in line with increases in the retail prices index. He will then be able to pass on the balance of his estate to his nephews and niece.
