Monday, October 22, 2007

In UK, long term care insurance is becoming less popular

The market for long-term care insurance is declining, the Association of British Insurers (ABI) has said, possibly as policies are becoming more expensive due to people living longer.

Long-term care insurance can cover people to help meet the cost of either being cared for in their own home or in a residential care home and it usually comes into effect when a person fails to accomplish two or three everyday activities, such as feeding or dressing themselves.

Jonathan French, a spokesperson for the ABI, said that consumers might expect the long-term care insurance market to be growing in tandem with the ageing population in Britain; but with policies becoming more expensive as providers add on the cost of people needing longer periods of care, the market is in fact in decline."As with any age-related insurance policy, the older you are the more expensive it will be," Mr French said. "If people did want to look at buying this kind of product, as with a pension, it's best to start as early as possible. If you wait until you have retired to look into this policy, the likelihood is that your premiums are going to be very high."He added: "The insurance industry is looking at this issue very closely. It's our view that if things go on as they are, both in terms of the public sector and the private sector involved in long-term care, it will become an unsustainable problem."Long-term care already costs the state and individuals huge amounts of money. Quite often people have to sell their properties in order to pay for long-term care, and doubtless these were properties which in many cases doubtless the owners wanted to bequeath to their relatives. We are working with the government and other organisations in this field to work out how we can move towards solving this problem."

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