Watch out – you could be paying care fees twice

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If you have a relative in a care home, there’s a possibility they could be paying for care fees twice. How? Well, they could be paying once from their savings and once from a care fees policy that they’ve either lost or forgotten about. If your parent or relative needs care or is in a care home, make sure they don’t pay for it twice.

Paying care fees twice – forgotten policies

Symponia, which is an umbrella organisation for care fees planning advisers says that the reason some people may have ‘forgotten’ or lost long term care policies is that in the 1990s, a number of companies sold policies that you could buy before you needed care, to pay your care home fees.

  • Many people took these policies out in their 60s and around 44,000 policies were sold.
  • The policies could be paid for with regular monthly payments or a one-off lump sum.
  • Several companies offered them, including Bupa, Norwich Union (now Aviva), Partnership Assurance, PPP Lifetime Care and Scottish Widows.

SAVVY TIP: Today, you can only buy a policy to pay your care fees when you need to have care at home or go into a nursing or residential home. However, in the 1990s you could buy it many years before you needed care and without knowing whether or not you needed it.

What’s the problem?

The problem – according to Janet Davies of Symponia – is that some people who took out policies have either forgotten about them or lost them because they:

  • Never told family members at the time, such as children.
  • Paid for the policy with a single lump sum, rather than regular payments, so there is no payment showing up on a bank statement today.
  • Have dementia or another problem which means their memory is affected.

What can you do?

If you are looking after your parent or parents’ financial affairs, you should try and see if there’s any paperwork or policy documentation that might how they took out a pre-funded care fees policy.

SAVVY TIP: Janet Davies says that Symponia members will automatically do a cross check if they advise someone about a care fees planning issue, to make sure that they’re not automatically covered. If you have your own financial adviser who specialises in care fees issues, it’s worth mentioning that your parent/relative could have their own policy, if you think this could be an issue. Symponia has a fixed fee ‘policy verification service’ where you can ask an adviser to check how much a policy they have will pay out and whether it’s still right for your parent’s needs.

What happens if they have paid twice?

If your parent is currently paying for care when they shouldn’t, you should be able to get a payment from the company they have the care policy with.

If your parent is in care now

Long term care insurance providers Partnership and Friends Life (which includes Bupa, as they took over Bupa’s clients when they stopped selling these policies), will check their database to see if a policy is in place. At the moment, Aviva and Scottish Widows have not signed up for this scheme, but, in the meantime, care fees advisers can ask these companies directly if they have a ‘letter of authority’.

If a policy is found a claim is submitted (with the help of the adviser).

The person in care has died

Sometimes family members or executors find policy details when they are sorting through the effects of the person who has died. Whilst the insurance companies do not want to advertise the fact that retrospective claims are a possibility, the nature of the plan and the likely health condition of the policyholder will mean that such claims will be considered.

SAVVY TIP: If a claim after someone has died is successful, the policy will pay the unclaimed monthly benefit to the deceased estate.

Useful links:

You can find a list of companies that specialises in later life and care fees and who support what we are trying to do at SavvyWoman on the directory.

Related articles:

Can you give away your home to avoid paying care fees?

Savings accounts if you have power of attorney for an elderly relative

Finding a good care home for a relative with dementia

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