We are facing a review - can Symponia help?
Back in the early 1990s, Commercial Union & PPP Lifetime Care introduced long term care insurance plans, and by definition these were insurance policies designed to pay out an agreed amount of money towards care costs, at an undefined time in the future.
Policyholders would submit future claims when they were unable to perform certain daily tasks (known as activities of daily living) an/or when they were suffering from a mental impairment such as dementia or Alzheimer’s. Premiums were paid either on a regular basis (monthly or annually) or by a single premium.
Over time, other insurance companies, such as Norwich Union, BUPA, Scottish Widows and Scot Am (now Prudential) entered the market place, and whilst each company had its own idiosyncrasies, the objectives of the plans were the same.
However, by 2004, the vast majority of players had withdrawn from the marketplace, and had stopped offering plans to new policyholders, various reasons were given for this; firstly the initial take-up rate was lower than anticipated, but more importantly we believe the claims experience was higher and more prolonged than was first envisaged.
Most policies also had an integral "review factor", and during 2004 amidst a flurry of media attention PPP Lifetime Care started to review the relevant policies, and some of these reviews have been considerable.
These reviews were higher than anyone could have expected and several main broadsheet newspapers have run stories about the effect the requests for higher premiums are having on policyholders.
If you are facing a review, there are some things that you can do to ensure that any decisions you make are both informed and right for you and your circumstances.
- Don’t automatically cancel your policy, there are alternative options for you to consider, you may want to discuss these with the insurance company, although it is unlikely that they will be able to offer you actual advice.
- Revisit your original concerns and objectives to check your policy still meets your requirements.
- If you purchased the plan from an Independent Financial Adviser, it may be beneficial to go back to them for continued advice.
- If you purchased your plan directly from the insurance company, it may be more difficult to locate your original adviser, as most companies no longer offer this facility.
- If you cannot contact your original adviser, try to locate an Independent Financial Adviser who specialises in the area of care fees planning, look for both proven experience and the CF8 qualification.
- Conduct a review exercise, concentrating on your needs and wishes now.
- Compare the answers to step 6 with the details and monthly benefits of your existing policy and with the assistance if your adviser make the necessary and appropriate changes.
- Consider other care and legal related aspects, such as writing and/or updating your Will and the possible establishment of an Enduring Power of Attorney.
- The review exercise may uncover other financial concerns such as Inheritance Tax that you may want qualified advice with.