Care Home Insurance Guide

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Care insurance is designed to cover the costs of long term care for either yourself or your partner.

What is long term care?

Long term care is provided to people who are unable to carry out their usual daily activities, such as eating and bathing, for a prolonged length of time as a result of a chronic illness or disability.

In most cases it is the elderly who require care over the longer term, due to either increasing frailty or chronic illnesses such as a stroke or cancer.

Care can range from personal supervision and assistance with normal everyday activities to medical interventions, and can be provided in a care home or in the person's own home.

However, the cost of care is not cheap, with the average annual fee for residential care homes currently amounting to 18,000. In cases where a nursing home is needed to provide constant medical care, the average cost rises to 25,500 a year.

One of the best ways to help cover these huge fees is to take out a long term care insurance policy.

See how much you could save on your care home insurance

Types of care insurance plans

Insurance based plans are one of the main categories of long term care plans and consist of the following:

Immediate care

This is a tailor-made insurance option for those who require urgent care. It provides a guaranteed income for life in exchange for a lump sum investment like an annuity pays out until you no longer need care, which is usually when you die.

Deferred care

These are similar to Immediate Care Plans with the only notable differences being that benefits are paid out after a few months or years, not straight away, and the cost of cover - Deferred Care Plans are usually much cheaper than Immediate Care Plans.

They are suitable for people who can afford to pay for care for a few months or few years, but want some protection if the care continues beyond that period.


Pre-funded Care Plans are designed to meet the needs of individuals who are concerned they may need care, at home or in a home, at some point in the future. Payouts commence once you meet the insurer's criteria in terms of inability to perform certain daily activities. Some plans, however, have restrictions for example, they may only pay out for 3 years.

Care cash

This care insurance option pays out a cash sum and/or an income for a set period/ amount of time in the event that you require care in the future. The plan covers you if you become ill or suffer an injury that means you can no longer perform one or more of the following five activities of daily living:

  • Dressing
  • Feeding
  • Mobility
  • Continence
  • Using the toilet

*Note; policies vary in what they regard as activities of daily living and the number of activities the policyhlder is unable to perform in order to rceive a payout.

Who provides Long Term Care Insurance?

The following companies provide LTC plans in the UK:

  • British Friendly Society - an incorporated friendly society that provides a care cash LTC insurance product called Century Retirement Plan.
  • Friends Life a specialist life insurer that offers a Lifetime Care insurance option (Immediate Lifetime Care) and a Deferred Care product (Secured Lifetime Care).
  • Partnership - specialist provider of financial products for people with health conditions. Also provide both Lifetime and Deferred Care plans.
  • Universal Provident an underwriting agency specialising in health insurance. Offers a pre-funded LTC insurance product called LivingCare.

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