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.
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.