Financial products are often sold, not bought, so it might not have come as much of a surprise to the protection industry when pre-funded long-term care plans disappeared off the shelves.
Even a decade ago, such products were scarce but realistically clients just could not see the need to pay years in advance against a future event that might not even come to pass.
Brian Fisher, long-term care marketing manager for Aviva, explains the demise of these products: “Pre-funded long-term care policies were available from the early 1990s until about 2004, by which time all providers, apart from one, had pulled out of the market.
“Sales of these products had been disappointing. They had reached a peak of almost 8,000 policies in 1996 but by 2003, had fallen to less than 3,000 policies across the entire market.”
No demand meant these products were economically unviable, the providers point out.
While immediate needs annuities, bought at the point of need, certainly meet demand, few life offices actively market such products.
For example, life and pension specialists such as LV and MGM Assurance do not operate in the market.
While the Care Act 2014 sparked plenty of speculation about whether new products could be created to help bridge the funding gap for care, little seems to have been achieved in the years since the Act received Royal Assent.
Indeed, all respondents to this guide believe there is a distinct lack of innovation and too little provision. But why?
As with the pre-funded care plans, general apathy among the UK populace when it comes to basic cover is partly the problem.
Steve Lowe, group communications director at Just Retirement, says: “Research from Just Retirement suggests 77 per cent of people aged 45 and above have yet to think about care or speak to their loved ones about this eventuality.”
Despite figures from Age UK suggesting an estimated 2.3m - 2.8m adults in the UK currently in need of care, people have not recognised the possibility they could require help in later life, or the fact the state may not be able to continue to support people fully should they need this type of assistance.
Mr Lowe adds: “People are not going to make provision for an eventuality they have not considered.”
Janet Davies, co-founder of long-term care fees advisory network Symponia, also believes the industry has not shown any great proactivity.
She says: “Far too many providers have sat on the sidelines waiting for a change of perception and/or legislation which sadly has not arrived.”
After the merger of Partnership and Just Retirement in April 2016, which put the combined market cap at £1.4bn, there are just two providers in this market: Aviva and the merged JRP Group.
A lack of competition and choice, certainly, but according to Ms Davies, this might not necessarily be bad news for your clients.