We consider the Financial Conduct Authority (FCA) definition of a long term care insurance contract and the background to long term care provision in the UK. We look at the different types of long term care, the health authority responsibilities in the provision of continuing care and any resulting funding implications for the individual.

We then look at how current legislation affects the provision of advice on long term care insurance, particularly with reference to the responsibilities of a local authority. We consider the availability of alternative sources of assistance and possible limitations on their use. We then deal with the complexities and implications of the relationship between the adviser, the client and third parties when advising on long term care insurance.

Taxation issues related to long term care insurance plans and legal considerations that need to be taken into account when giving long term care advice to individuals and representatives are also covered.

We look at eligibility to claim under a long term care insurance contract, the different costs associated with long term care provision and the factors that create variations in them. We also consider the interaction between the eligibility for means-tested and non means-tested benefits in the provision of advice on long term care insurance.

We look at the suitability of arrangements available to fund and maintain long term care needs and whether the level of risk they present to the client is appropriate and acceptable. We then discuss situations that might indicate to an adviser that a client's long term care provision needs to be reviewed and identify the consequences of that review.

Building a successful career in personal finance

When held with the Diploma in Financial Planning or the Diploma in Regulated Financial Planning, it meets the FCA's appropriate qualification requirements for advising on long term care products and retirement advice.

Learning outcomes

At the end of this unit, candidates should be able to demonstrate a knowledge and understanding of the:

• definition, purpose and scope of long-term care contracts and how they interact with State benefits and State-funded long-term care;
• main features and functions of the different types of contract that can be used to fund long term care and how they can be arranged to meet an individual's needs;
• principal legal, taxation and regulatory issues that are relevant to advice on long term care insurance;
• importance of regular reviews to ensure that long term care insurance cover remains appropriate.

Assessment

• 2 hour exam
• 50 multiple choice questions and 5 case studies, each comprising 5 multiple choice questions
• 70% nominal pass mark (the actual pass mark may vary from one session to another to ensure consistency in pass standards)
• The 2022 pass rate for this unit was 90%

Course delivery

Instructions on accessing your course on RevisionMate will be sent to your registered email address. This is typically within two working days of your order being placed, but may be longer, particularly if payment is made by bank transfer or the unit is available as a pre-order.

Study material - editions available

2023-24 edition (applicable to exams sat 01 Sep 2023 to 31 Aug 2024)