Insurer Zurich has announced it will start selling policies designed to help cover care costs, the Financial Times has reported.
Following the launch of the new Care Act, which caps costs for care at £72,000, insurers have been under increasing pressure from ministers to launch insurance to cover the cost of care. Until now, insurers have been reluctant, stating that there was no demand for such a product and that it was difficult to encourage consumers to save for retirement, let alone care costs.
However, despite initial reluctance, Zurich Insurance have announced they will be launching a new care product within the next few months. Gary Shaughnessy, Chief Executive at Zurich UK Life, told the Financial Times they are planning to adapt their existing “whole of life” insurance to include costs for care in old age.
New cover details
Previously, the “whole of life” policy paid out upon death, and was designed to cover costs associated with funerals and inheritance tax. In addition to this, Zurich’s new policy will also pay towards care costs if policyholders are unable to complete basic personal tasks, such as washing and dressing, or have a medical condition that requires long-term care.
Although this new cover will provide additional solutions for paying for care in later life, it is not the solution ministers were hoping for, as it may not cover the complete cost of care. As this particular policy will only pay a fixed sum for care costs, ultimately the onus of paying for care up to the £72,000 cap will still reside with the policy holder. Should the cost of care exceed the level of cover there will still be a shortfall to be funded by the individual. As accommodation and living costs are not covered by the care cap, care home bills could still run much higher for some individuals.
For more information on care costs and affordable care options, the Good Care Group is here to help you. We understand that costs can be a daunting aspect of seeking care for yourself or your loved ones, and we can offer help and advice, either at our website, or by contacting us.