14 July 2010
Partnership launches new product to pay for care without selling your home
- CPPO loan enables people to fund their care while retaining the family home.
- Fixed interest rate of 6.99%
- Upon death the property will be sold and the proceeds used to repay the loan, interest and charges.
- No negative equity guarantee: the repayment required to settle the CPPO loan will never be greater than the proceeds of the property’s sale.
PARTNERSHIP, the UK’s leading provider of long term care insurance, has launched its Care Plan Payment Option (CPPO) which provides an innovative way to pay for care fees, without the need to sell the family home.
Chris Horlick, Managing Director of Care at Partnership said: “For many people, the most realistic way to fund care home fees is through the sale of the family home. Partnership’s new lending product, the CPPO, has been developed to enable a property owner to meet care costs, while maintaining the peace of mind which many associate with property ownership.
“The CPPO also gives the property owner the flexibility to rent out their property while they are in care, or, let a member of their family or friend live there for the duration of their stay in care, subject to Partnership’s agreement,” Horlick added.
Whilst the property must be vacated at the time the CPPO completes, the loan enables the property owner to rent out the property once the CPPO loan has completed. There is also the option to return home should the services of a care home no longer be required.
“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,” Horlick said. *
Main features of the Care Plan Payment Option:
- The CPPO loan is a form of mortgage with interest being charged on the outstanding balance.
- Interest is calculated daily and added to the CPPO loan monthly. The CPPO loan and all interest and charges are payable upon the sale of the home at death, or, if it is sold beforehand. No repayments are made during the life of the CPPO loan.
The fixed rate of interest is 6.99%. This is based on the typical rate for equity release products in the market.
- The CPPO loan can be repaid either partially (subject to a minimum amount of £5,000), or in full at any time, without any early repayment penalty.
- The CPPO loan is used to purchase a Partnership Care Plan, which 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, the income is tax free. **
Upon death the property will be sold and the loan, together with interest and charges, will be repaid from the sale proceeds.
- No Negative Equity Guarantee. The longer the CPPO loan runs, the higher the balance will become. If there should be insufficient funds from the sale of the home to repay the CPPO loan, Partnership would provide a No Negative Equity Guarantee. This ensures that the repayment required to pay off the CPPO loan will never be greater than the proceeds from the property sale.
- Partnership Care Plan Money Back Guarantee. A six month money back guarantee is included in the CPPO loan, so should death occur within the first six months of taking out the Care Plan, a percentage of the Care Plan premium will be offset against the CPPO loan, thereby reducing the balance due.
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Editors Notes:
The CPPO loan can be used to fund some, or all, of the cost of the Partnership Care Plan, however the maximum amount you can borrow will be the cost of the care plan.
The CPPO loan is only available in association with a Partnership Care Plan in order to fund care home fees.
There are a small number of property types which are not eligible; however your financial adviser will provide guidance before recommending this option to you.
* In the next 20 years, the number of people aged over 85 is predicted to increase by over 60%, while the number of people aged over 75 will increase by around 70% (Laing and Buisson 2009).
** The rules governing taxation are subject to change and depend on individual circumstances.
Press Enquiries:
Chris Horlick, Managing Director, Care
0759 596 4156/ 020 7618 2834
Partnership
Chris.horlick@partnership.co.uk
Jim Boyd, Director of Corporate Affairs
0797 345 8675 / 0845 108 7240
Partnership
jim.boyd@partnership.co.uk
Rebecca Dwyer, Consultant
0774 757 8617 / 01273 777144
David Andrews Media Ltd
rebecca@davidandrewsmedia.co.uk
David Andrews, Senior Consultant - Director
07941 255855 / 01273 777144
David Andrews Media Ltd
david@davidandrewsmedia.co.uk
About Partnership:
Partnership is a specialist provider of financial solutions for people with health/ lifestyle conditions, as well as those suffering from a serious medical impairment. Partnership was the first company in the UK to offer higher retirement incomes by taking account of people’s health and lifestyle conditions. It has been a consistent innovator developing this sector by championing the needs of those with even modestly reduced life expectancies.
Partnership has led the way in providing products designed specifically for individuals whose health and lifestyle is likely to result in a reduced life expectancy. Partnership is expert in the field of medical underwriting and has a unique in-house data set. Partnership believes that its years of accumulated data and knowledge gives it a unique understanding of the impact of health and lifestyle choices on longevity. This, in turn, enables it to offer the most accurate assessment of a client’s life expectancy and therefore offer the fairest price to them.
Partnership has the most comprehensive offering in the retirement sector and offers a complete range of Enhanced Annuity solutions, from clients who smoke or have minor health impairments, through to serious conditions such as cancer. Partnership is the largest provider of annuities for Long Term Care funding in the UK, with 80% of the market, and also offers specialist Protection solutions for clients who have been declined cover from standard providers. Partnership offers a firm commitment to supporting advisers in growing their business.
Partnership was winner of the 'Long-term Care Provider' award at Health Insurance Awards 2009 and this year’s Simply Biz ‘Annuity Provider of the Year’ award.” www.partnership.co.uk
Partnership is a trading style of The Partnership Group of Companies, which includes Partnership Life Assurance Company Limited (registered in England and Wales No. 05465261), which is authorised and regulated by the Financial Services Authority. Registered office: Sackville House, 143 – 149 Fenchurch Street, London EC3M 6BN.