Proposed changes to rules on the funding of care home places could lead to a new market for insurance against the cost of fees.
A government commission has drawn up plans by which most people will be responsible for the first £30,000 to £50,000 of any care home bills, after which the government will pick up the tab. Only those with few savings or assets will be exempted from the contribution.
While the commission report suggests people be encouraged to save for the fees, with a possibility that this could be built into pension saving, the report also anticipates insurers will step in to offer a care home costs plan.
Such policies would be particularly attractive to insurers as the potential payouts would inherently be limited to the cap on the contribution. However, the high risk of needing care could mean high premiums, with a Daily Telegraph source estimating that it could cost £17,000 to buy protection if the cap is the full £50,000.
The newspaper also notes there is talk of a variant on insurance which would not pay the full costs of care, but rather would pay out the difference between fees in council-run and private homes.