Did you know that if you go into long term nursing care and you have over £16,000 in liquid investments, the government can utilise those investments to pay for that care? However, life assurance policies cannot be touched. An insurance Bond is a form of life insurance, even though there is no medical underwriting and often no cost for the life assurance.

The recent CRAG report from the Department of Health, Social Services and Public Safety department deemed “if an investment bond is written as one or more life insurance policies that contain cash-in rights by way of options for total or partial surrender, then the value of those rights has to be disregarded as a capital asset in the financial assessment for residential accommodation. In contrast, the surrender value of an investment bond without life assurance is taken into account”. (Section 6.002B)

Insurance Bonds can be used as a protective wrapper to invest into everything from cash deposits, gold, gilts, shares, and property, so choosing the right provider is crucial.

Over the last year or so at Archers we have been offering HSBC’s open architecture investment bond which offers total transparency of charges whilst offering around 2,000 funds.

Unlike most Bonds HSBC impose no initial charge or exit penalties. With some with-profit bonds paying annual bonuses of no more than 1% the HSBC Bond should be seen as a replacement. As with traditional bonds the HSBC product can also be placed under trust.

Doesn’t it make sense to ring fence your family’s future inheritance from the clutches of the local authority!