Excited about making a choice that will mean more friends, more fun, and precious peace of mind for the future, but wondering how to afford assisted living? Good news: there are several financial options available that you might not have considered.
How to afford assisted living: it might be easier than you think.
Don’t make the mistake of deciding right off the bat that assisted living is out of reach. Take a moment to consider some of these funding sources that could work for you and your family.
Long-term care insurance
This form of Insurance can cover all or a portion of long-term care needs. It’s one of the best funding options, because a small investment over time pays off in the form of affordable care. However, not all long-term care insurance policies cover all services, nor do they all pay the same for similar services. If you’re still relatively young, consider investing in long-term care insurance now. If you or your older loved one needs care now, but doesn’t have insurance, long-term care insurance is no longer an option.
Life insurance settlement
Many families wondering how to afford assisted living overlook this option. A life settlement is the sale of a life insurance policy by the policy owner to a third party. The seller typically gets more than the cash surrender value of the policy but less than the amount of the death benefit. These funds are put into an irrevocable trust, which makes payments to the community. Your family can then set aside a certain amount for inheritance and choose how much to allocate for care. When proceeds of a life settlement are used to fund senior living by paying for the costs of long-term care, tax deductions may apply.
Selling your home
For many seniors, making a move to senior living means selling the family home. It can be a good option if there is no spouse still living in the home. Selling your home relieves you and your family of worries of upkeep, repairs, and taxes. It’s a good idea to work with a senior real estate specialist for assistance in staging your home, pricing it to full advantage, and overseeing the entire process. This option could play a big part in your ability to afford assisted living.
Home equity loans
A home equity loan, sometimes called a “second mortgage,” offers access to a large sum of cash drawn from the equity in your home. If you’re looking at very costly care for a severely ill parent, home equity lines of credit from multiple sources—you, your parent, a sibling or two—could be your best option. You’ll have to pay the money back, so budget accordingly. Your parent’s estate will have to repay a home equity loan that wasn’t paid in full. So, if you’re counting on a hefty inheritance, talk to an estate attorney about how a loan might change things.
Life insurance conversion
Many people don’t realize that converting a life insurance policy into a Long-Term Care Benefit Plan is an option when considering how to afford assisted living. Yet anyone with an in-force life insurance policy can transform it into a prefunded financial account that disburses a monthly benefit to help pay for long-term care needs such as home care, assisted living, skilled nursing and hospice. Unlike life insurance, this account is a Medicaid qualified asset.
How to afford assisted living? Check out all your options. Then make the choice that is right for you.
Whether you are looking for yourself, or for an older loved one, you want to find a lifestyle that offers newfound freedom, safety, comfort, convenience and above all, the independence to enjoy life as you choose.
At PMMA (Presbyterian Manors of Mid-America®), the first thing we want you to feel is welcome. Each of our communities is unique and special in its own way, but they’ll all make you feel warm and welcome from the moment you enter. We consider it an honor to empower you or your loved one with a place to call home at one of our assisted living communities.
Discover what top-quality assisted living means for you. When you’re searching for senior living and care for yourself or someone you love—you’d prefer to align yourself with a provider that puts people above profits. At PMMA, we’d love to tell you more. Contact a community near you to learn more and to schedule your personalized tour.
