It’s a novel concept and one that is said to have drawn the interest of Treasury officials – so how does a long-term care insurance product sound?
That is the concept that has been pitched by Royal London – it wants the product to be funded using tax free pay from a pension drawdown account.
According to reports in The Times, a policy paper put forward by the giant UK insurer suggests that those approaching the age of retirement could make payments, tax-free of course, into a so-called “care pension.”
“There are various ways in which this could work, but a simple model would be that the policyholder commits to pay a regular insurance premium directly from the drawdown account to the product provider,” Royal London policy director Steve Webb told the publication.
Read more: Long term care insurance in the UK: What's going on?
For its part, the insurer would then pay the policyholder a set amount into the special care account should the individual go on to develop care needs. It suggests that premiums in the region of £100-£150 a month would be enough for insurer to offer the product.
According to The Times, the concept has garnered some support among the Treasury – but what do you think of the idea? Leave a comment below with your thoughts.
Related stories:
Royal London ends speculation, to stay in Cheshire East
Royal London reveals claims data
