Example: early vacancy guarantee
Mr and Mrs Patel received a cash lump sum of £129,247 from their property, which was valued at £250,000, paying a fixed rent of £250 per month.
Included in the plan was an early vacancy guarantee (also known as an inheritance protection guarantee), which is an optional feature within a home reversion plan designed to protect the estate if the planholder(s) die or move into long-term care shortly after taking out the plan.
Continue
The terms of the early vacancy guarantee they agreed were based over the first five years, and if Mr or Mrs Patel died or entered long-term care, the plan repaid a percentage of their property value, less the lump sum they received. The terms they agreed were as follows:
Year
90%
80%
50%
40%
25%
Percentage received
Continue
After two years Mrs Patel had to move into long‑term care. Mr Patel now wants to downsize and move closer to his wife’s care facility. Using the early vacancy guarantee, he would receive a payment of £70,573 should he choose to vacate the property.
£250,000 × 80% = £200,000 – £129,247 = £70,753
Return to start
CeRER26 4.5.1 Example early vacancy guarantee
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Created on February 16, 2026
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Transcript
Example: early vacancy guarantee
Mr and Mrs Patel received a cash lump sum of £129,247 from their property, which was valued at £250,000, paying a fixed rent of £250 per month. Included in the plan was an early vacancy guarantee (also known as an inheritance protection guarantee), which is an optional feature within a home reversion plan designed to protect the estate if the planholder(s) die or move into long-term care shortly after taking out the plan.
Continue
The terms of the early vacancy guarantee they agreed were based over the first five years, and if Mr or Mrs Patel died or entered long-term care, the plan repaid a percentage of their property value, less the lump sum they received. The terms they agreed were as follows:
Year
90%
80%
50%
40%
25%
Percentage received
Continue
After two years Mrs Patel had to move into long‑term care. Mr Patel now wants to downsize and move closer to his wife’s care facility. Using the early vacancy guarantee, he would receive a payment of £70,573 should he choose to vacate the property.
£250,000 × 80% = £200,000 – £129,247 = £70,753
Return to start