The market for social care insurance could take off if the government takes forward the conclusions of a landmark report on the topic, its authors believes.

The Dilnot Commission on the funding of care and support, published today, recommends that individuals should have to pay up to £35,000 in care home fees if they become disabled or infirm.

Beyond this figure, the government-commissioned report says that care fees should be the responsibility of the state. Currently, individuals with assets of £23,500 are expected to contribute towards their care.

On the issue of the insurance industry’s appetite for offering, the report says: “We have had extensive discussions with the financial services sector and think that our proposals would stimulate both supply and demand. By capping the overall risk that people face, new financial products could develop to support people in making their contribution.”

The report suggests that critical illness cover or life insurance policies could be converted to offer cover for care costs, according to the report.

Another area of potential growth is top-up insurance, providing extra sums to supplement the amount people spend on accommodation and general living. Products could be linked to pensions, savings, insurance and housing, according to the commission.

But the report says that social care currently involves “too much uncertainty involved for the private sector to take on the full risk.”

These uncertainties include how long people will live, changing care and support needs and costs.

“These uncertainties have meant that the sector has struggled to design affordable and attractive products that people want to buy. No country in the world relies solely on private insurance for funding the whole cost of social care.”

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