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Immediate Care Plan

The ICP is a special kind of annuity, specifically for the elderly, taken out when they need Long Term Care and not before. It pays an agreed tax free amount directly to the care provider, at regular intervals and is guaranteed for the rest of that person’s life. It can increase over the years to look to keep pace with care fee increases.

An ICP provides complete peace of mind and enables the person in care to have financial independence, dignity and choice of where they receive care, for the rest of their lives. It removes the burden on the family members or attorneys to keep funding the fees from the capital, often watching the value drop as the years progress.

How it works

A lump sum is required to purchase an ICP and the cost is based on the age, health, sex and amount to be covered. We would typically look at the elderly person’s total income (excluding their investment income) compared to the total cost of care and cover that shortfall.

For example, if an elderly lady moves into a care home which costs £750 per week and her State, private pensions and Attendance Allowance amounts to £550 per week, she would need to fund the £200 per week from her capital.  This is the shortfall amount which would be covered by the ICP.

Intermediate Care Plan

Each case is assessed by the ICP providers after having obtained health and care information from the doctor and care provider (no medical is required).

Other ICP Options

Capital protection can also be purchased, to cover situations where the elderly person dies shortly after purchasing the ICP.  The amount of capital protected can be up to 75%, which decreases with the payments made to the care provider.  This benefit can often be cheaper than people would expect.

An ICP is not right for everyone but we strongly believe that it should always be considered if someone has to fund their own care fees.  If it is not considered then the elderly person concerned or their family/attorneys are making financial decisions based on limited information.

For those with relatively modest savings, an ICP can mean the elderly person does not run their capital down to below the Local Authority thresholds and then rely on Social Services to arrange their care, thus losing their financial independence and choice of where they receive care.  The remaining capital could be invested to provide some growth so it may also mean, when the elderly person passes away, that the family may inherit some of the estate.

For those with larger estates, an ICP is very effective to help reduce inheritence tax on death, if the cost of the ICP comes out of the taxable portion of the estate.  The capital is exchanged for high guaranteed income and is removed from the estate immediately.  This has the effect of reducing the actual cost of the ICP by the inheritance tax saving made.

Once the care fees are being funded by the ICP, the elderly person could then look to carry out further inheritance tax effective steps with the remaining capital as they will not need to worry about keeping the funds to pay for care

Each case is assessed by the ICP providers after having obtained health and care information from the doctor and care provider (no medical is required).


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