What is a Care Annuity?
You may be one of the 84% of the population who do not know what an annuity is, so it is likely that you are also unaware of care annuities and what they do. Essentially an annuity is a way of getting a regular income which can be used to pay for all sorts. The majority of annuities are used to fund personal pensions in retirement.
Care Annuities, however are slightly different. You may be interested in one of these if you have an elderly relative in a care home at present, one who is likely to need care in the future or perhaps you are planning for your own old age. Statistics tell us that one in five men who are 65 and one in three women who are 65 will need to see out the end of their days in a care home. This is a significant number of people. On top of this many more will need care help to be able to remain in their own homes. As we are all generally living a lot longer it follows that the amounts needed to cover residential or home care are substantial.
This is where a Care Annuity could help. You would need to invest a lump sum with an insurance company and this will provide an income for the rest of a person’s life. The company will take your current medical situation and predicted life expectancy into account when finalising any calculation. The beauty of a Care Annuity is that if the annuity is paid direct to the care home then any income is tax free, quite a consideration.
The lump sum that is typically invested in the main comes from the sale of property which the person going into a residential home no longer requires. Purchasing a Care Annuity certainly provides peace of mind for the person who needs the care and perhaps more importantly for any relatives who may have feared having to find money to fund their loved ones care and peace of mind is something to be taken seriously.
A word of warning, you need to seek specialist advice to go down this road. There are specialist companies who deal in this field, consult a few so that you can get the best option for you.
For annuity advice you can trust speak to the advisors at rightannuity.co.uk and get a free no obligation quote on the best annuity rates for you.
