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When TLC isn’t enough, LTC comes into it’s own

When TLC isn’t enough, LTC comes into it’s own

Over the last decade, the autumn television season has been dominated by a battle between ITV’s The X-Factor and the BBC’s Strictly Come Dancing. While initially the X-Factor led the way and regularly thumped Strictly in the ratings, the gap has been narrowing and for the last couple of years it is Strictly that is the dominant offering on the television. One of the factors involved in this turn-around is the audience the two shows are pitched at, with the X-factor being aimed at a younger audience than Strictly. The improvement in Strictly’s ratings mirrors the ageing of the UK, as the rate of increase in the older segment continues unabated.

This shift in the demographics is leading to a change in the financial requirements of the population. With an ageing population that is thinking differently about it’s needs, there should be a corresponding significant rise in the interest in long term care for the aged and how to fund it, which should lead to a stronger interest in long term care products. However, the rise in interest in these products has been minimal to date. This may be about to change.

An ageing population can be expected to focus far more on the likelihood of needing care. While the Dilnot reforms take care of the medical needs part of the problem once the ceiling of £72,000 is hit, the hotel costs remain the responsibility of the individual or his/her family for the remainder of the person’s life. This can be quite a substantial amount and will certainly cause problems for the individual unless time is taken now to plan for this event.

One of the key issues of course is the cost of LTC products. However, this may be more easily solved now, as people reaching retirement age will have access to their pension funds to use as they wish. This will make it easier for them to use some of these funds to provide for a deferred long term care product, thus allowing perfectly healthy 67 year olds to provide themselves with protection for when they are much older and to prevent them from having to lose their homes to pay for care if it turns out that they need it.

Savvy advisers will be including LTC products and the future need for long-term care as one of the factors to be discussed at any retirement review. Long-term care should form a key part of any future planning for retirees and the LTC market is ripe for revolution. Product innovation is needed and is indeed happening with Prudential and Aegeas planning to launch new whole-of-life long term care products to make this product type more affordable.

One of the ironies of the Chancellor’s pension freedom is that it may weaken the sale of pension products whilst strengthening the sales of protection products such as LTC products. But anything that ensures the provision of TLC to the audience of Strictly has got to be welcomed.

Tom Murray

Twitter: @TomMurrayDublin or @Exaxe

Google Plus: TomMurray

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