A way to pay for care fees without the need to sell the family home has been launched by Partnership, one of the UK’s leading providers of long-term care insurance.
Partnership claims that its Care Plan Payment Option (CPPO) provides an innovative way for a person to pay care home fees without having to sell their own home to fund it.
The CPPO loan is a form of mortgage with interest being charged on the outstanding balance.
CPPO loan enables people to fund their care while retaining the family home. It charges a fixed interest rate of 6.99 per cent and, upon death, the property will be sold and the proceeds used to repay the loan, interest and charges.
The CPPO has a no negative equity guarantee: the repayment required to settle the CPPO loan will never be greater than the proceeds of the property’s sale.
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.
“For many people, the most realistic way to fund care home fees is through the sale of the family home,” said Chris Horlick, Managing Director of Care at Partnership.
“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.”
“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.”
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