The starting point can be tax-advantaged care insurance, which is offered by more and more insurance companies. Long-term care insurance with a lifetime payment has been supported by the state since this year with the possibility of deducting up to 48 thousand crowns per year from the tax base.
Concerns about the ability to take care of oneself in old age are growing the most out of all the risks that the association of insurance companies monitors. From 2021, they increased by 13 percentage points. The number of seniors who cannot do without long-term care is gradually increasing due to the demographic curve.
“Today, social services are no longer able to accommodate the number of clients who are at a high level of self-sufficiency and need permanent help. Family members are taking care of them, and they are not only under social and psychological pressure, but also financial,” said Jan Matoušek, Executive Director of the Czech Insurance Association.
Often, the care of a dependent person is left to the closest relatives, who may have health problems themselves or need to go to work.
Self-sufficiency insurance should bring relief to the family, employers and ultimately the state
“Anyone who has any experience of caring for a dependent family member will confirm that solving such a situation is a big problem. It is often up to his relatives to find the appropriate equipment or provide care services. Self-sufficiency insurance should bring relief to the family, employers and, after all, to the state as well,” commented Kooperativa spokesman Milan Káňa.
He reminded that the office’s decision on non-self-sufficiency means that a person will start receiving a state allowance for care ranging from CZK 880 to CZK 27,000 depending on the degree of dependence. At the same time, this moment becomes an insured event and he starts receiving monthly payments from the insurance company. The insurance company then pays the monthly annuity until the end of the life of the insured. Regardless of whether the client lives at home or in a care facility.
For example, Kooperativa also provides clients with advice on what they are entitled to and what the care options are as part of their Flexi self-sufficiency insurance.
According to Káni, in order to cover all the costs associated with the loss of self-sufficiency, a person would need to receive at least 20,000 crowns a month from the insurance company.
The contribution from the state is usually not enough
He also gave an example of how much insurance costs and how it can pay off: “At the age of fifty, the client will take out insurance for the mentioned 20,000 per month. From the age of 80 to 86, he will be completely self-sufficient, and it can be calculated that the costs of care not covered by the state allowance for additional help or for quality residential facilities will exceed a million crowns. The insurance premium will then be CZK 1,400 per month and he will pay a total of 500,000, but he will receive a total of 1.44 million crowns from the insurance company.”
Although the state pays a contribution for care, according to estimates, people have to cover about a quarter of the necessary costs themselves.
“This share depends on the quality and scope of care we demand, but also how much we rush to it. The insufficient capacity of public social services is also a problem. That is why it is often necessary to use private services, which are more accessible, but significantly more expensive,” pointed out the product director of NN Životní pojišťovna Michal Korejs.
Care in private facilities is expensive
The earlier a person takes out insurance, the lower the premium. “If, for example, a stay in a private nursing home costs 50,000 and a person with a loss of self-sufficiency receives a pension of 20,000 and a care allowance of less than 15,000, he will need another 15,000, which can be covered by insurance. If the client buys insurance at the age of 40, he pays less than 400 crowns a month for such a contribution from the insurance company,” pointed out Korejs.
According to the spokesman of Generali Česká pojišťovna Jan Marek, for a single room in a “better” home for the elderly, you pay up to 30,000 CZK per month in addition to pension and care allowance, for a double room from 10,000 CZK, it always depends on the location. According to him, the price of an hourly work of a caregiver starts at 300 crowns.
“Interest in this insurance is increasing only slightly so far,” said Marek. However, as Allianz spokeswoman Marie Petrovová pointed out, in a few years, strong generations of the so-called Husák children will begin to retire. “Care in the absence of self-sufficiency can thus become relevant for a large number of families who will not have enough money to cover the costs of this type of service,” she pointed out.
Insurance companies are gradually adjusting their products so that it is possible to draw tax relief from the state. “We insure self-sufficiency, or dependence on care, in the form of a one-time payment. The client can negotiate an insurance amount of up to three million crowns. We are planning to launch tax-advantaged care dependency insurance with pension payment in the following years,” informed, for example, ČPP spokeswoman Renata Čapková.
