Medical Insurance

Long Term Care is needed when a person becomes ill or has a disability that makes them unable to carry out their activities of daily living with the probability that this disability will continue over the long term. Quite often, it is the elderly who require care over the longer term because of increasing frailty due to ageing or the effects of a stroke or a fall.

Long Term Care can also be required for people suffering mental illness such as dementia or Alzheimer's disease. A person suffering from dementia will need personal supervision and assistance to carry out normal daily activities.

The care required can take many forms, from simple domestic assistance to medical interventions and may be provided in a residential or nursing home or in the person's own home. A residential care home does not provide nursing services which are provided by the NHS or nursing homes.

Many people would expect the National Health Service to look after them but the NHS no longer covers all the costs associated with the care of incurable conditions in old age. We are all living longer and unfortunately, this increased longevity is not always matched by increased good health in the later years and there is a high probability that some form of Long Term care will be needed. In fact, approximately 47% of people of 75 have a long standing illness that limits their lifestyle.

In addition to the demographic trends, social and political changes are also contributing to the need for people to consider some kind of provision. The growing pressure on local government spending means that Social Services departments will no longer automatically pick up care bills. The NHS will only provide and/or pay for the Nursing Care Service Component of a person's long term care service needs. All other costs and services associated with long term care are the care recipient's responsibility unless they qualify for Local Authority assistance.

It is therefore important to consider options to provide income for Long Term Care. Long Term Care can be covered completely or in part by long term care insurance. Most plans let you choose the amount of the coverage you want, as well as how and where you want to use your benefits. A comprehensive plan includes benefits for all levels of care, custodial to skilled. Some options that could be considered are:

•   A pre funded policy
    Could be ideal if you don't think you'll need care for quite a while. You can pay in one lump sum or make regular payments.

•   An immediate need policy
    Useful if you need to pay for care straight away. You use a lump sum to buy an annuity. The income from this then goes towards your care.

•   Home Equity Plan
    Whether you or your partner go into a nursing home or receive long-term care in your own home, this plan lets you use some of the value of your property to pay for it.

Private Medical Insurance (PMI) cover provides you with the option of private medical care in addition to the care provided by the National Health Service.

You (or your employers) pay monthly or annual premiums, the cost of which is determined by your personal circumstances (e.g. sex, age, previous medical history) and the type of cover you choose. Premiums are reviewed each year.

Note that private medical care does not offer the same range of treatments that the NHS does. It does not provide emergency treatment, or care for a long term condition. Its aim is to provide care for straightforward treatable conditions.

There are many different policies to choose from but they all roughly fall into three categories: