Vitality Dementia and FrailCare Cover
Dementia and FrailCare Cover is a new no initial cost add-on to Vitality’s Serious Illness Cover (SIC).
Vitality has launched the variant as it says current solutions to the ageing population are falling short of the growing need for customers to prepare for the costs of living with conditions in later life, particularly with regard to degenerative conditions such as dementia, Alzheimer’s, Parkinson’s, stroke and general frailty.
Dementia and FrailCare Cover is an industry first and is aimed at helping people prepare financially for becoming frail or getting dementia in later life.
Vitality points out that care costs in later life can vary from minor costs (e.g. buying devices to help cope), through to nursing costs. Dementia and FrailCare Cover aims to help fund some of these costs by making a severity-based payout following deterioration of health in later life.
The cover starts immediately following the end of the SIC term (but not after age 70), and continues as a whole of life benefit. The benefit amount paid out is a cash lump sum equal to 50% of the remaining SIC benefit amount, with a cap to the overall benefit of £100K (which is indexed and increases annually). For Accelerated Life and SIC policies, Dementia and FrailCare Cover also includes a Funeral Benefit equal to 10% of the remaining life benefit amount, subject to a cap of £10k.A
Comment: The idea of funding for old age is a good one, but few people do so, and the insurance sector offers little to help. That’s partly because back in the 1990s, a number of insurers invested heavily in long term care insurance but sales were sluggish and most withdrew from the market a few years later mostly after incurring losses.
Vitality is known for its innovation and this plan offers a simple add-on to its established SIC product. So, customers simply carry on paying in effect once their cover runs out and the sum insured is halved and capped at £100K. It’s a simple and clever solution and deserves to do well. We expect further innovation in this area and Vitality could well be among those with a range of solutions in the later life area.
In fact, a bit like pensions planning, funding for later life care could well mean buying various part solutions rather one ‘big’ solution.
Plus points: A simple add-on to the well-regarded SIC plan; Cover only starts when the SIC plan ends; £100K will make a big help with care fees and costs; No need to make decisions now – just wait until the SIC plan comes to an end.
Not so plus points: The market has been slow to buy later life solutions so far; Only half the SIC benefit; Benefit is capped at £100K and, for some, £100K won’t cover all their care costs.
Website: http://www.vitality.co.uk.
Rating (max 10): 9 Platinum
Tags: Later life; Vitality