Partnership launches new long term care funding option

Partnership has launched an annuity product enabling people to fund long term care without having to sell their home.

The Care Plan Payment Option (CPPO) is a form of mortgage which is used to fund all, or some of the cost of a Partnership Care Plan. This in turn provides a level of guaranteed income for the life of the policyholder. If income payments are made directly to a registered care provider then the income is tax free.

Interest on the outstanding balance is calculated daily and added to the CPPO loan monthly. No repayments are made during the life of the loan which must be repaid once the home is sold. However, the loan can be repaid either partially or in full at any time without any penalties.

The plan comes with a no negative equity guarantee as well as a money back guarantee in case death occurs within the first six months. The terms also enable the property owner to rent out the home once the loan has been completed. They can also return home should they no longer need to be in residential care.

"We believe this is another welcome development in the care insurance market, as the sector is expected to grow significantly to reflect the predicted increase in the number of elders in our society," says Partnership's managing director of care, Chris Horlick.