This tailor-made product option is for those at the point of needing care. Immediate care plans are a type of annuity, i.e. they provide a guaranteed income for life in exchange for a lump sum investment.
You buy this long term care insurance policy when you must already need care, at home or in a home.
You will be medically assessed to see how much you must pay for your chosen level of income.
It pays out until you no longer need care, which is usually when you die.
If you just fancy living in a residential home, but do not need care, this product is not available to you.
You must be assessed as needing care, so claiming is almost certain.
You cannot normally cancel or get your lump sum premium back, except during the statutory day cooling off period after purchase.
If you die earlier than expected, your family does not get any money back, although some policies offer an option to safeguard the capital in the event of early death
If you die later than expected, the insurer just pays up
In some cases a long term care insurance policy is on a level benefit basis, some are index linked, and some offer you the option of index linking it
When you die, unless the policy offers a death benefit, there is no payout to your estate.
Some stipulate that the benefit is paid direct to a care home or carer. Others pay, or allow payment direct to the insured.