Care funding plan benefits and risks

As with all financial products, there are some risks and benefits associated with our Care Plan. 

Is our Care Plan suitable for your client? This summary of the key risks and benefits will support you as you help them and their families make an informed decision.

Care Funding Plan

Benefits Risks


The plan puts clients in control of their care funding, reducing the uncertainty of meeting long-term care costs.

Meeting the cost of care needs

The plan does not guarantee to cover the full costs of the client’s care, and if the cost of care exceeds the income from the plan the client will be responsible for paying the difference themselves.


The plan reduces the risk of the client’s estate being eroded by future care costs, giving them increased certainty as to what assets they will be able to pass on.

Rising costs

Care costs will be subject to inflation, and the client may need increasing amounts of care in the future so, unless there is an agreement with the care provider, their care costs are likely to increase. These may not be covered by the plan.


The plan gives clients the flexibility at the outset to tailor and escalate their income to help cover increases in care costs.

Change in circumstances

Once the plan has been set up, clients will not be able to alter their income payments to reflect any change in their circumstances. Also, the plan cannot be cancelled or cashed in at any time after the first 30 days.


Your client can ensure the plan provides a certain level of benefit by choosing one of our plan protection options.

Total amount paid by the plan

The total income payments from the plan may be less than the purchase price, and may be considerably less if the client dies shortly after the start of their plan.

Peace of mind

At what is a difficult time in a client’s life, the plan can help give them the peace of mind that the financial side of their care requirements is taken care of.

Losing tax efficiency

If the income is paid direct to a registered care provider, the plan benefits from a favourable tax treatment. Should this tax treatment be changed by HMRC or income be paid to a party other than a registered care provider, some of the income may be subject to tax.