The population is getting older so, unlike other life products, Vitality LifestyleCare Cover provides protection for members at risk of age-related illness. It opens up a new market of clients who want to cover future care costs and protect their families from the financial burden of care.
The mortgage will be paid off, the kids should have finished college and there could be a nice nest egg tucked away, so what costs are your clients considering when they think about their future retirement?
They might be looking into winter holidays in the sun, or their annual health club membership. However, they may not have considered one of the biggest potential money pits for people in their later years – the cost of care. Talking about the financial burden of living with an age-related disease is not an easy topic for discussion but it is an important one to broach as an adviser. With health and life protection, you can help provide security for your clients and their families at the time they need it most. But Vitality offers even more. It’s proven that making healthy lifestyle changes can reduce our risk of age-related diseases in the future. That’s why, with the introduction of Vitality LifestyleCare Cover, we’re putting wellness at the heart of managing future care costs and revolutionising the way the insurance industry thinks about ageing and illness.
THE COST OF AN AGEING POPULATION
People are living for longer. Currently, around 10% of the UK population is over the age of 75 and that figure is expected to rise to 15% by 20351. With an ageing population comes an increase in the number of people suffering from degenerative diseases – conditions such as dementia, Alzheimer’s disease and Parkinson’s; conditions that worsen over time and for which there are currently no cures. There are approximately 800,000 people in the UK with dementia and one in three people over 65 will develop the condition; it’s already the leading cause of death for women2. In addition, the risk of developing other chronic illnesses, such as stroke, cancer and heart disease, increases as we get older. Currently, 60% of people over 65 will require some form of care3.
The cost of caring for people with these conditions is placing an increasing financial burden on individuals, families and society. For example, the total cost of dementia care in the UK is currently £26 billion per year4. That’s equivalent to £32,000 annually for each individual, with only a third of this amount coming from the state5. The average cost of care in a residential home in England is currently £532 per week or £27,664 per year6. For care in a nursing home, those costs increase to £750 per week or £39,000 per year. The cost of care at home comes to an average £11,000 per year, which equates to a carer visiting for just 14 hours per week7.
The Care Act, to be introduced in April 2016, will cap the cost of care at £72,000, although this will not cap the costs of food or accommodation. This still leaves significant prospective outgoings for anyone in need of care due to age-related or degenerative diseases.
REDUCING RISK WITH HEALTHY LIVING
The statistics above are an eye opener but it’s not all bad news. In fact, there’s a wealth of data that suggests making healthy changes to the way we live now will pay huge dividends for our future health and help reduce the risk of diseases associated with age and an unhealthy lifestyle. For example, people who follow four out of five healthy behaviours – not smoking, exercising regularly, eating a well-balanced diet, staying at a healthy weight and moderating their alcohol intake – are 60% less likely to develop Alzheimer’s disease and other forms of dementia than those who follow none 8.
A healthy lifestyle reduces the risk of other age-related conditions, too9:
- 35% lower risk of heart disease and stroke
- 50% lower risk of type 2 diabetes
- 68% lower risk of hip fracture
HOW VITALITY CAN HELP CUT CARE COSTS
Our new LifestyleCare Cover has been designed to help cover some of the costs of these conditions. It offers life insurance cover for the whole of your client’s life, plus early access to funds if they develop a degenerative disease and can no longer look after themselves. With Vitality LifestyleCare Cover, a 45-year-old is expected to claim nine years earlier than if they had a standalone Whole of Life policy.
Importantly, with its incentives to get active, eat well and reduce unhealthy behaviours such as smoking, Vitality LifestyleCare Cover also helps people to stay healthier in the first place, so they reduce the risk of developing age-related illnesses and/or delay their onset. With Vitality Optimiser, your clients can also enjoy benefits such as Active Rewards and Status Rewards when they make healthy changes to their lifestyle, and up to 40% discount on initial premiums, with the ability to keep their premiums low if they engage.
WHAT’S NEW FOR ADVISERS?
The typical protection market has not kept pace with an ageing population. Instead, it continues to offer insurance that’s weighted to life before retirement, with 81% of protection in force up to age 6510. LifestyleCare Cover offers an innovative approach to protection (it factors in increased life expectancy and future care needs) to offer greater security to clients and their families. For advisers, this opens up a new market of existing customers looking to protect their families from the burden of long-term care costs; wealthy clients who want help towards their care costs, not just protection for their inheritance tax bill; and new customers who haven’t yet bought protection but understand the added-value that Vitality offers. Vitality LifestyleCare Cover has been developed as an innovative product for a changing world. Isn’t it time you started talking about its benefits?
VITALITY IS LEADING THE WAY
An older society means age-related conditions such as dementia, Parkinson’s and stroke are increasing, and so are the associated care costs. With retirement savings often insufficient to cover those costs – and the state already unable to pay two-thirds of the cost of dementia – it increasingly means individuals need to plan for their future care needs.
- ONS, 2010 based population projections
- Alzheimer’s Society
- Dementia UK Second Edition
- Fisher Centre for Alzheimer’s Research Foundation
- NHS, 2014
- Swiss re, 2014