Immediate Needs Annuity

The Guaranteed and secure way to pay for care

An Immediate needs annuity or "Immediate Care Annuity" is a specific type of insurance which guarantees to pay care fees indefinitely, removing any worries that money may run out.

Immediate Need Annuities – What are they and why use them to pay for care?

Immediate need annuities are specialist insurance policies that anyone needing care, or their representative can purchase to provide a tax-free* income that can be paid monthly to your care provider to help ensure care fees can be met for the rest of your life, giving peace of mind and helping remove any worries that money may run out.

They are available from age 60 and there is no maximum upper age limit and are suitable for paying care at home as well as in a care home. Immediate Needs Annuities can either provide a level income, or by paying a little extra you can buy an escalating annuity where the annual benefits increase each year either by a requested percentage or by RPI to help offset increases in care fees. Such escalating annuities are the only way of paying for care which guarantees definite annual increases in benefits, but their advantages don’t stop there.

Providing the income is paid to a registered care provider the income an immediate needs annuity provides is also tax free.

How much Income do they provide?
Immediate need annuities can normally provide whatever level of income you request.

• The full cost of care, or to help keep the cost down, or
  
• Just the shortfall in income you have.

The shortfall being the difference between care fees being charged and any ongoing income from pensions and State Benefits such as Attendance Allowance you will continue to receive. This can easily and quickly be calculated using our instant Care Fees Shortfall Calculator.

Who are Immediate Needs Annuities most suited to?

Immediate Need Annuities are ideally suited to those who:-

• Need to pay for their own care and not entitled to free NHS Continuing Healthcare
  
• Are receiving care at home, or in a care home
  
• Want the certainty and peace of mind that care fees can continue to be met for however long required
  
• Want to cap the cost of care by paying a one-off premium to protect any remaining savings will be preserved for future inheritances
  
• Don’t have a high attitude to investment risk and want certainty of income
  
• Are professional Powers of Attorney (such as solicitors) and want to secure their clients care.
  
• Sole POA’s who are the only beneficiary of the person needing care and they want to ensure care would continue even if they died before the person receiving care
  
• Need care and have an Inheritance Tax Liability as the premium paid will not only help pay their fees, but the premium will immediately reduce their taxable assets and thereby help reduce any future IHT liability.

Who shouldn’t consider an Immediate Needs Annuity?

Immediate need annuities shouldn’t be considered by those who may qualify for NHS Continuing Health Care or feel where the need for care is only temporary.

They are also NOT SUITABLE for this who care will be fully paid by their Local Authority or who just want to insure against the risk of possible needing care in the future where you need long term care insurance.

How much do Immediate Need Annuities cost? - Immediate Needs Annuity Premiums

Immediate need annuities are all individually priced based on:

• the benefit amount or income you want it to provide,
• the options you chose- escalation and/or capital protection but more importantly
• age and medical history.

Consequently it’s impossible to give you any accurate figures but if you complete our quote request form our specialists Care Financial would be pleased to obtain accurate quotes for you FREE OF CHARGE from all providers.

If, however, you just want an idea, one provider Just has provided us with some idea as to what typical Immediate Need Annuity premiums MIGHT BE to provide £20,000 for different ages.

	Escalation 0%		Escalation 5%
Age	Residential	Nursing	Residential	Nursing
75	£147,000	£126,500	£182,400	£153,000
80	£138,800	£117,000	£157,200	£138,400
85	£109,200	£101,100	£126,600	£116,200
90	£86,600	£81,000	£97,000	£90,200
95	£68,200	£64,400	£74,300	£69,900

Source: Just 2018

Please remember these are only just examples and actual premiums will differ quite significantly, hopefully cheaper once medical details are provided.

Also Aviva, Legal & General or National Friendly can offer significantly different premiums – and may be substantially cheaper than these.