But 'greater commitment' from intermediaries needed too, says Defaqto
Almost three quarters of financial advisers would like to see more long-term care (LTC) products available, according to research published today.
Financial research company Defaqto said it estimates that 71% of intermediaries would like to see more LTC products on the market.
In spite of the aging population and the well-documented problems around funding care in old age, the financial services industry has largely failed to develop products and solutions that have appealed to consumers. In 2010, the last business in the UK still providing pre-funded LTC insurance products, Partnership, suspended sales of it due to low levels of take-up.
Since then, the Commission on Funding of Care and Support has made a number of recommendations around funding LTC, including a call for a lifetime cap on care costs. Defaqto said today that if this recommendation is adopted, financial services products could be developed to enable clients to insure the first £35,000 of care costs.
However, the industry analyst said its research shows that only 17% of advisers think it likely that the Commission’s proposals will be adopted, while many advisers think it unlikely or are unsure.
Ben Heffer, Defaqto’s insight analyst for life and protection, said that if the government adopts such proposals, it stands to open up the product market and offer “clear” product sales opportunities for advisers.
However, the lack of products is not the only problem within the LTC insurance market. Defaqto’s research also showed that 61% of advisers do not advise their clients on LTC for a variety of reasons.
Heffer said: “The product market is poorly served with just a handful of plans to choose from but, if the LTC market is to flourish, greater commitment from the adviser community is also required. The purpose of the paper is to demonstrate the need for long term care insurance and to highlight the opportunities for advisers. The need exists now and advisers are uniquely placed to add value.”
Defaqto has produced a paper on LTC for advisers which can be downloaded at: www.defaqto.com/adviser/ifa-guides.