Government and insurers will work together on long-term care reforms
The Association of British Insurers (ABI) and the government have signed a joint statement of intent stressing the importance of people understanding the costs and planning involved in long-term care.
The statement sets out that the government and insurance industry will work together to "help people get the information and regulated advice they need to plan and make decisions; and create the right conditions for a larger market of financial products, which will give people more choice."
Norman Lamb, care and support minister, says: "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."
He hopes that reforms to the industry will lead to more products to help people plan for their future.
Minor but important changes
Alastair Black, head of customer income at Standard Life, says "minor but important" changes could help people fund the cost of care.
"The introduction of an impaired drawdown option, as offered to annuitants, and reducing the drawdown minimum income requirements could be the first steps in helping people fund their care costs," he suggests.
"At the core of getting this right for consumers is to understand the needs of those people who face difficult decisions, says Clive Bolton, manager director of at retirement at Aviva.
"Supporting people at a time when they actually have to make a choice about their care, often when they are in their 70s, is essential. It is far better to put arrangements in place in a considered manner, rather than as a distress purchase," he adds.
This article was written for our sister website Money Observer
Association of British Insurers
Established in 1985, the ABI is the trade body for UK insurance companies. It has more than 400 member companies that provide around 90% of domestic insurance services sold in the UK. The ABI speaks out on issues of common interest and acts as an advocate for high standards of customer service in the insurance industry. The ABI is funded by the subscriptions of member companies.