Long term care premiums could be reduced by half if the Government acts on the Royal Commission's pr...
Long term care premiums could be reduced by half if the Government acts on the Royal Commission's principal recommendations.
According to PPP lifetime care, a 70 year old male looking to insure costs of £14,000 pa would currently need to pay £99 pm in premiums and a woman of the same age, £143. But if personal care costs were covered by the taxpayer, as the Royal Commission recommended, the premiums could fall as low as £42 and £60 respectively, according to Laing and Buisson figures.
"In most cases premiums would be halved because people will only need to insure accommodation costs," explained Paul Bennett, public relations manager at PPP.
Bennett estimated there are around 30,000 LTC policies in operation and if the Government made personal care costs free this could broaden the market. He said the product could become suitable for the mass market rather than just high net worth individuals, making it more of an attractive product for IFAs to sell. He added: "If the Government acts on the Commission's main recommendation and if premiums become cheaper as a result, LTC becomes more attractive to more people."
Independent research among MPs has indicated the majority support free personal care and would like to see the Government take action within the next six months.
In its response to the Royal Commission report, PPP urged the Government to seriously consider making personal care costs free. "In a situation where the Government is being pushed to act quickly, nobody would feel that it would be fair to return to the drawing board and the Commission's main recommendation of making personal care costs free is a workable solution," said Bennett.
He added this would be fair and equitable, and would provide the public with clarity. "The current system is unfair. The level of support offered to the individual can depend on what county they live in and people who have saved all their lives may have to sell their assets to fund care while those who have not saved and have less than £16,000 will get full State support."
