Nearly three quarters of advisers (71%) believe providers should create new prefunded long term care products, but more IFAs need to advise in this sector, a free Defaqto research paper has found.
In July 2011, the Commission on Funding of Care and Support published its report, Fairer Funding for All. The report made a number of recommendations but chief among these was a call for a life time cap on care costs. If this recommendation is adopted, such products would enable clients to insure the first £35,000 of care costs.
However, Defaqto found only 17% of advisers think it is likely that the Commission's proposals will be adopted, while many advisers thought it unlikely or were unsure.
Ben Heffer, Defaqto's Insight Analyst for Life and Protection, said: "If the Government adopts Dilnot or similar proposals, it stands to open up the product market and offer clear product sales opportunities for advisers.
"However, the lack of products is not the only problem within the long term care insurance market. Our research also showed that 61% of advisers do not advise their clients on long term care for a variety of reasons.
"The product market is poorly served with just a handful of plans to choose from but, if the long term care market is to flourish, greater commitment from the adviser community is also required.
"The purpose of the paper is to demonstrate the need for long term care insurance and to highlight the opportunities for advisers. The need exists now and advisers are uniquely placed to add value."
Advisers can download the long term care paper at: www.defaqto.com/adviser/ifa/guides.
