National Friendly Assisted Living Insurance
National Friendly says its new Assisted Living Insurance is the industry’s first product specifically aimed at supporting older people to extend independent living in their own home in later life. It does so on effectively a whole of life basis.
Customers can choose one of two initial levels of maximum cover - £20,000 or £30,000 - which increases each year, to help offset inflation. The policy provides funding for assisted living, and includes the following benefits:
Assisted Living Allowance. This provides professional care services (nursing, domiciliary or therapy) delivered in the customer’s own home. The benefit pays up to £1,000 a month. The benefit continues to be paid if the customer transfers to a care home (with or without nursing).
Respite Care Allowance. This pays up to £2,000 if the customer has an unpaid carer who needs to take a short break.
Assistive Devices Allowance. This pays up to £10,000 for equipment such as a stairlift or wheelchair ramps to enable the customer to carry out certain activities of daily living. Also covered under this heading is modifications to the home to fit or accommodate equipment, such as widening of doorways to accommodate a wheelchair.
Care Advice Benefit. This gives telephone access to care advisers to help customers make care decisions appropriate to their circumstances. The service can be accessed either by the customer or by the second contact on their policy, and can provide invaluable advice at difficult times.
When setting up the policy, customers choose when their claim starts to be paid, with either a 6 or 13 week deferred period from when they qualify for the benefits. National Friendly says benefits will rise each year and it estimates premiums will increase by 2% a year, although that is not guaranteed. In addition, an annual policy review could see premiums rise or fall, based on likely future claims and a range of other factors. The plan is available to UK residents aged 50-75 at outset.
Comment: National Friendly is now not only back in the PMI sector, but this new plan takes it into the long term care insurance area too.
That market was heavily promoted back in the 1990s but all rather ended in tears as insurers lost money, and in some cases damaged their reputations, not least because a lot of those early product designs were quite poor.
This new plan targets people having care at home and, while that is most people’s preferred care option, it does mean the plan could be less suited to those who end up needing to go into a care home. That said, the Assisted Living Allowance is still paid if they transfer to a care home where, in practice, the benefit is likely to pay towards rather than for the full cost of care
There is some element of uncertainty over premiums as they rise each year by 2% but, in addition, policy reviews could see the end figure more or less than that. That’s not likely to be big issue if the numbers turn out as anticipated but then such assumptions were one of the problems back in the 90s…
Overall, this plan could appeal to those who would value financial help if they need long term care in the future. The emphasis is on care in the home, but it helps towards care in a care home too. If nothing else, we welcome developments in the long term care funding area and applaud National Friendly for being brave enough to try something new.
Plus points: Simple cover that helps fund care in the home; Choice of two cover levels and two deferred periods; Continues to pay benefit if the customer transfers to a care home; the Care Advice Benefit is free and could be invaluable in practice.
Not so plus points: The plan will typically contribute towards care costs rather than pay for everything (not really a criticism as State benefits and things like pensions income also contribute to such costs; Benefits are limited; Premiums are expected to rise over time.
Website: http://www.nationalfriendly.co.uk.
Rating (max 10): Innovation: 9. Overall: 7.5. Silver
Tags: Later life; National Friendly