Assisted Living Financial Solutions
When you can no longer manage daily living in your own home or with family members, an apartment at The Courtyards is a great option. While Medicare does not cover assisted living, you may have other resources to help pay for your new home. Consider the following:
Long Term Care Insurance
If you or your family member have a Long Term Care Insurance policy, be sure to visit with your insurance professional in order to completely understand your benefits and to ensure that you get what you have paid for. It is very common for insurance companies to decline payment on the first request. An advocate at The Courtyards can help by contacting the insurance company in order to work through the issues and get approval. To qualify, many companies will require that you need help in at least two areas of Activities of Daily Living (ADL’s) such as bathing, dressing, grooming, transferring from bed to chair, walking, or toileting.
Long Term Care insurance benefits vary widely depending on the policy. Benefits may range from $1,000 to more than $10,000 per month.
A life insurance policy can provide financial support now. Ask your insurance professional about cashing out the policy, accelerating it, or about living benefits. Often, the company will buy the policy back for 50 to 75 percent of its value. The rules will be different depending on the company and type of policy.
If the company won’t redeem the benefits value, you may choose to sell the policy to a third-party company in return for a “senior” or “life” settlement, often up to 75 percent of the policy’s face value. After buying the policy for a lump sum, the third party company continues to pay the premiums until the policyholder passes away, at which time the company receives the benefits.
There are also “life assurance” benefits or life insurance conversion programs. These allow beneficiaries to switch the benefit of a life insurance policy into long-term care payments. Life insurance conversion pays up to 50 percent of the value of the policy. Although this is less than a life settlement, it is an option for lesser-value policies that might not qualify for life settlement.
The Veteran’s Administration
The VA (Veteran’s Administration) can be very generous when taking care of those who served in the US Military. If you or your loved one is a veteran, you may be eligible for benefits that can be used to pay for assisted living. If you have service-related injuries or disabilities it may be easier.
“Non-Service Connected Improved Pension Benefit with Aide and Attendance” (or Aid and Attendance as it’s commonly called) pays toward the cost of assisted living. This is available to veterans or a surviving spouse who is disabled and whose income (not assets) is below a certain limit. A veteran must have served at least 90 days on active duty and/or at least one day during wartime. The medical condition doesn’t need to be service related, but you must meet medical qualification. There are asset considerations. Work with your accountant, banker and trust officers to assure your benefits won’t be effected and to learn ways to shield your assets. Contact the VA and learn more about your qualification.
When you apply with the VA, have your military discharge papers and a letter from your doctor stating you have a valid medical condition that makes you appropriate for assisted living. Prior to meeting with the VA, complete the formal application form “Veteran’s Application for Compensation and/or Pension”.
The professionals at The Courtyards are available to help our veterans receive the benefits they rightly deserve.
Consider Selling or Renting if you Own Your Home
Selling your home frees up your equity allowing you to use it for assisted living, often on a tax beneficial basis and eliminates the cost of owning and maintaining a home. We understand that your or your Mom and Dad’s house may be treasured. We get it. You may want to consider renting out your home to supplement the cost of assisted living.
If you have trouble liquidating assets quickly, short-term “bridge” loans are a common way to access funds until assets are sold. They are usually available up to $50,000 and are designed to fund the move to assisted living while waiting for the sale of property or to be approved for a pension.
The Courtyards can help with these decisions and we are aligned with real estate professionals that can assist in the process of selling or renting the home.
A reverse mortgage allows you to borrow money against the equity that has been built up in your home. This is a good option if either you or your spouse (or Mom or Dad) wishes to stay in the home while you need assisted living. When the remaining spouse moves, the reverse mortgage is repaid through the sale of the home. If you or your family would like to own the home after you move, this is probably not the best choice.
If you have considerable savings but are worried about outliving your resources you may consider an annuity. When you purchase an annuity, you pay a lump sum to the insurance company to receive regular payments over a specified time period (usually the rest of your life). The biggest benefit of an annuity is that even if your purchase premium runs out, you can get more money back than you put in. It can be more beneficial for you than just spending your savings.
ElderLife Line of Credit
ElderLife www.elderlife.com offers lines of credit programs for those who need assistance with funding assisted living while waiting for another financial event like the sale of a home. These options are available to both seniors and their families.
Tax Deductibility Benefit
Current tax laws allow for deduction of certain medical expenses associated with living in Assisted Living communities for the purpose of receiving medical care. The deduction may be applicable for adult children who are paying for some or all of the costs associated with living in an Assisted Living community. We advise consultation with a tax consultant to confirm availability before making financial decisions.
Companion Living Options
Companion Suites offer a more affordable roommate option, and The Courtyards offers resident apartments and a ‘match-making’ service to ensure that a compatible roommate can be found. It’s a great option that doesn’t sacrifice any of The Courtyards’s amenities and services.
SeniorRelocationUSA offers a program to help seniors sell their home and make the transition to a senior living community – at no additional cost. Go to www.seniorrelocationusa.com.
Paying for assisted living might seem like a daunting task and hopefully these ideas help in that process. Contact us anytime to discuss these and other options that may be available to you. We are here to help in any way we can.