Through training, advisers are raising awareness among themselves and their clients of long term care, writes Peter Gatenby
Will regulation and classification of care fees boost the uptake of long term care insurance (LTCI)? In short, Yes. The evidence is already coming through to prove it.
Commentators have pointed to past sales of LTCI plans and said 'only 40,000 sales ' hardly a success story.' But realistically, what else could we have expected?
On one hand we have the very topic of long term care. Is it something you like to think about? Most people want to think of their retirement years as fun and full of activity, not suffering illness and paying for care.
On the other hand, we have had governments of different persuasions making sympathetic noises about changing the system, the unfairness of it all, and how they want to help those who had worked and saved, should they need care later in life.
So not surprisingly, many people simply held back, hoping the Government would change the rules and would magic away this potential burden. Against this background, 40,000 plans begins to sound like a success story.
But now the Government has made its mind up. The importance of spelling out the rules on free nursing care ' in any part of the UK ' is not so much about the definition of nursing, or even whether the figures are the right ones.
Rather, it is the unwritten statement saying this is precisely how much help you can expect from the taxpayer. Any other costs are yours.
England was the first part of the UK to implement its new rules in October 2001. Since then we have seen LTCI business move up dramatically. Many people may wish the taxpayer was going to be more generous, but what they are doing now is accepting the debate is over ' they know there are some long term care costs they will have to pay.
So more people are enquiring about and buying LTCI plans. In the final quarter of 2001, sales were up around one-third over the same period in 2000.
In the same way those with savings and assets now think about inheritance tax (IHT), so the average homeowner will become accustomed to thinking about their care costs. It is the new certainty which is making the difference.
Couple this with the regulation of all LTCI plans and we are definitely set for a dramatic upturn in business.
The omission of LTCI from the list of regulated investments has meant that not all advisers have got to grips with the subject, and have not even discussed the topic with their clients.
As regulation approaches, so we at Age Concern Financial Partnerships are seeing this change. There is more awareness among advisers. More are approaching us for training and education ' doing themselves and their clients a service.
With more discussion, more awareness, more certainty and more acceptance of the way care is funded, LTCI business is set to grow.
