Please note: this article was not written by a financial or legal specialist, and does not cover every circumstance. Please consult a specialist before making ay financial or legal decisions
Are you planning for your potential future care needs? Or the needs of your loved one? Investment bonds are one such offering that can be utilised for care costs in the future.
Purchasing investment bonds to pay for care
Often treated as exempt assets by local authorities or local councils, investment bonds can be a useful way to protect some of your assets from being taken into account during a future residential care fees assessment.
It is recommended to consult with a financial adviser, as they can offer you impartial and expert advice on financial products from across the whole market.
If you decide to purchase insurance bonds, then you can go ahead and do this directly purchased from a life insurance provider, or through your financial adviser.
Questions about funding care?
Care Sourcer’s friendly care experts are on hand to provide guidance on typical care costs, help you explore your funding and benefit options, or even negotiate care fees on your behalf.
Call us on freephone: 0800 098 8299 (Mon-Fri, 9am-5pm)
Taking investment bonds into account during a care needs assessment
To find out whether you qualify for funding for care, you should first arrange a care needs assessment through your local authority (which may be called a local council or trust, depending on where you live).
If the care needs assessment recommends that care is needed, a further financial assessment (means testing) will be arranged to see if the local authority will pay towards the care.
If you have purchased investment bonds before you started to need care, the local authority might exclude any money tied up in investment bonds when assessing your savings and assets. This is because they are treated as life insurance policies and therefore may be disregarded.
Purchasing investment bonds if you already need care
It is important to note that if you already need care and then purchase investment bonds, this may be seen by the local authority as trying to avoid paying towards care and therefore being a deliberate ‘deprivation of assets’.
The local authority may decide to calculate your financial liabilities taking the value of the investment bonds into account. This can mean that you are liable to pay more for your care than you can afford.
If you are thinking about giving purchasing investment bonds and know that you may need care and support in the near future, it is advised to get in contact with your local authority to ask them if it is likely to be seen as asset deprivation. Having a written response from the local authority may help if you need to dispute their decisions in the future.
Summary
How do I buy investment bonds to pay for care?
Insurance bonds are usually purchased from a life insurance provider, or through a financial adviser.
Can I buy investment bonds if I already need care?
If you already need care and then purchase investment bonds, this may be seen by the local authority as trying to avoid paying towards care and therefore being a deliberate ‘deprivation of assets’.
The local authority may decide to calculate your financial liabilities taking the value of the investment bonds into account. This can mean that you are liable to pay more for your care than you can afford.
Are there risks associated with using investment bonds to pay for care?
As with all investments, the value of your bonds can fall as well as rise, which could leave you unable to pay for the care you need. That’s why it’s recommended to consult with a financial adviser, as they can offer you impartial and expert advice on financial products from across the whole market.
Questions about funding care?
Care Sourcer’s friendly care experts are on hand to provide guidance on typical care costs, help you explore your funding and benefit options, or even negotiate care fees on your behalf.
Call us on freephone: 0800 098 8299 (Mon-Fri, 9am-5pm)