Care Fees Annuities

Care Fees Annuities are similar to Purchase Life Annuities in that the source of the funds is not from a pension, but from a single lump sum premium, paid by the annuitant or the annuitant's estate or the beneficiaries. These policies are meant to cover the on-going costs of long term care when the annuitant requires full time residential or nursing home care. The amount of income received is lilkely to be more generous than for other types of annuity, since your life expectancy at the time of entering a nursing home is likely to be impaired.

Care fees annuity payments are made by the annuity provider for the provision of an individual's long term care and will be paid for as long as they live. This can give the annuitant and their beneficiaries piece of mind knowing that the cost of their care will continue to be met.

People using care fees annuities to fund the costs of long term care are treated as being not liable to tax on the payments made by insurance companies under these annuity contracts, provided payments are paid straight to the provider of care. If the income from the annuity is paid directly to the annuitant it could be liable to income tax.

Applications for care fees annuities go through a process of medical underwriting. Where medical risk is assessed. This may involve assessing the applicant's medical records, or their ability to perform Activities of Daily Living.

Features of Care Fees Annuities include:

 

• Payments can be indexed to protect future income against inflation.
• You can choose for some of the money you paid in to be paid back to your estate, if you die within a set period of time.

Key Features Documents for Care Fees Annuities:

 

For product provider literature on Care Fees Annuities, please refer to:

• Liverpool Victoria Immediate Needs Annuity key features document.
• Partnership Assurance Immediate Needs Annuity key features document.