Personal finance: Good value in covering the cost of extended nursing

The product: Norwich Union's Long Term Personal Careplan (Future Assured).

The deal: One in three women and 20 per cent of men will need long-term care before they die.

This product aims to fund long-term care, bypassing tough local authority restrictions on the amount of help that can be given before a person's home must be sold to pay for care.

A 60-year-old woman can obtain cover worth pounds 12,000 a year for pounds 73 a month or a one-off premium of pounds 12,960. A male aged 60 would pay pounds 59 a month, or a pounds 9,380 lump sum. A higher premium could generate a higher benefit. Norwich Union will pay for nursing at home, wheelchairs, chairlifts or any similar aids. It will find nursing homes, or visiting nurses, and monitor their cost and quality.

Plus points: The policy removes a nasty risk facing thousands of pensioners who could lose their homes. The policy seems good value compared to many other providers. Ditching controversial and potentially humiliating "Activities of Daily Living" tests, NU uses a fuller test run by an independent assessor to validate claims.

Drawbacks and risks: Because this is an insurance policy, policy-holders may be among the two in three women, or four in five men, who never need long- term care. Premiums are then dead money. Scottish Amicable, by contrast, has an investment-linked contract whereby the money would pass to your estate if LTC were not required. David Wright, of financial adviser Johnstone Douglas, worries that premiums are cheap and may have to rise.

Verdict: A good offer. Worth considering if budgets allow.

Marks out of five: Three.

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