Pre funded care plans

Pre-funded care plans are no longer sold by insurers, but you may have an existing policy which offers:

• payment for care within your own home or a residential care home
• the option to buy at any age. Some insurers imposed a minimum age, but there is no official age limit
• the option of a death benefit payment, if you die early without needing care (this option is only available on some policies)  
• the option of payment directly to a care home, to your family, or to you as the policyholder

How it works

You buy a pre-funded plan with a lump sum premium, or an annual or monthly premium. The premium is usually reviewable (often every five years), at which time the insurer may increase premiums.

To be eligible to claim on this type of plan, you must be unable to perform certain daily activities. The insurer has criteria they use to define inability to perform certain activities of daily living. These activities are predefined.

If you have this type of plan, you should consider:

• what type of actitivities of daily living are included in the criteria
• whether you or your family will get any money back if you die or get to the end of the policy period without needing care, unless death benefit is included
• whether there are any restrictions, such as if you need care earlier than expected - some plans may only pay out if you are over 65 when you claim

Next steps

If you have an existing policy contact your insurer or read your policy document to find out what your plan covers.