We don’t worry about long Term Care until we have to – usually when a family member can no longer manage on their own.

But, most people know the basics.

It costs alot, it’s pretty hard to find a home that costs much less than £500 per week, commonly they are £600 – £700 pw and the nicer ones are £900 – £1100 per week.

And the other thing we know is that until you have sold your house and spent all but the last £23,000 of your life savings you have to pay for it yourself.

The second part of this is where I come in.

Quiet often paying for Long term Care is just a question of paying for it out of savings. But there is a second method which sometimes works and today I have had figures through for a customer that proves this point.

The client in question is widowed so the house needs to be sold (not usually necessary if the spouse remains in the house). And the house and his savings come in at about £160k total. The long term care costs are about £650pw and his pension income covers about £200pw. So, we need to find £450 per week.

Well, if he sells the house his £160k will attract, say £70 per week interest, so we will need to draw on the capital, until it is depleted down to £23000. It will last 6 years.

In the meantime, he will be getting stressed about his life savings just disappearing, and heaven knows what quandary his children will be in.

However, the plan B can come to the rescue.

I have a plan that will fund the long term care forever, in exchange for a lump sum. The companies who provide this plan will assess the life expectancy of the client and offer terms based on that assessment. For today’s client, they are saying that for a lump sum of £65000 they will pay the long term care costs for his lifetime.

If he lives 1 year, he will have lost out. If he lives 10 years, the company will lose out – the break even point is about 3 years – so there is a gamble to this (there are slightly dearer plans with a ‘return of fund’ promise in the event of death.)

So, for £65000, he knows that the balance of his savings are protected for his children, they aren’t disappearing towards zero. His children also know that their inheritance is protected, saving them from that awful quandary.

Sometimes the figures aren’t so easy, when the life expectancy is high, which is why I say this isn’t for everyone. However, in this example the plan really works pretty well.

It also has ‘soft’ benefits too. It can take the ‘money’ stress out of the family relationship – people in long term care often genuinely hate paying for it – getting a monthly bill for £2500 is huge. The other thing is – if there is a lovely home for £750pw and a pretty good home for £700 per week, it can make the lovely home affordable.

And isn’t that what it’s all really about?