Workable care insurance products still a long way off

Manipulation of current financial markets will be necessary in order to make effective care insurance products a reality, according to an industry-led review published this week by the Department of Health.

‘Financial care products: industry-led review’ has been published alongside a Statement of Intent – signed by Care and Support Minister Norman Lamb and director general of the Association of British Insurers (ABI) Otto Thoresen – which demonstrates an on-going commitment to making care insurance products readily-available.

The Statement has been interpreted as a disappointment to ministers and economists behind the Government’s Care Bill, in that the announcement of a cap on individual care costs has not resulted in an enthusiastic take-up of new market opportunities.

As a result, efforts to establish healthy care insurance products remain in their early stages and the Government and ABI are faced with having to create stimulus themselves, pledging to “do all they can to encourage the market conditions most conducive for the development of a full range of products to suit different needs”.

In the statement Mr Thoresen comments: “The insurance industry can play an important role in developing solutions to help people fund their long-term care needs. We have supported the introduction of a new care funding model, and believe the Care Bill provides a sustainable framework for both industry and consumers.

“The Statement of Intent sets out our commitment to working with the Government to create the conditions for the development of an insurance market that offers a range of products to help people meet their long-term care needs.”

Minister Norman Lamb added: “The current care and support system doesn’t work and is hugely unfair. People face losing almost everything they’ve worked hard for or being forced to sell their family home in a time of crisis to pay for the care they need.

“Our reforms will not only stop this from happening but will provide the industry with the certainty it needs to develop products that can help people plan for the future. I welcome this commitment from the industry and am excited to see how they take on the challenge of helping transform the way we pay for our care.”

The Government has until 2016 until the care cap of £72,000 comes into place, during which time plans have been set out for more consumer research and discussion with key organisations.

According to the review, efforts are likely to focus on achieving more flexibility for insurance providers, for example by researching life insurance policy options to pay off loans and deferred payments. Attempts will also be made to resurrect defunct products to see if new market conditions can make a success of them, with the aim of establishing stand-alone products that can be bought early in life.

Once again the ‘public ignorance’ of long-term care costs is recorded as being a barrier, with the review suggesting that ‘public information initiatives’ might be utilised in order to make care issues more prominent in the public consciousness, as has been achieved in the past with issues like racism and sexually transmitted diseases.