When it comes to paying for senior living, there are more options out there than you may realize, and it’s a good idea to learn about each one so you can make the best possible use of available funds.

Before you make any decisions about paying for senior living, you’ll want to gather and organize financial documents (for yourself or a loved one). These can include bank statements, insurance policies, monthly bills, pension benefits, investment reports, and Social Security information. You might consult with your tax or investment advisor for an overall view of your financial situation, as well as to hear what options they might recommend.

Paying for senior living: 3 possible options

1. Private funds. This is how most people end up paying for senior living, through their savings they have accumulated over the years, which can include bank accounts, retirement accounts, investments, and annuities. Some also use funds collected from the sale of the primary home if moving to a retirement community with an entry fee.

2. Long-term care insurance. Long-term care (LTC) insurance helps to pay for the cost of home care, adult day care, assisted living, memory care, skilled nursing, respite care and hospice by covering services typically not covered by health insurance, Medicare or Medicaid. Many LTC policies begin to pay benefits once an assessment has determined you need help with two or more Activities of Daily Living (ADL) or cognitive impairments; otherwise known as a benefit trigger.

Important to know: the older you are when you purchase long-term care insurance, the higher your premium will be. Your premium can increase—in some cases, significantly—after you have bought the policy. And it is difficult to predict how much coverage you will need in 20 or 30 years.

3. Life insurance conversion. Converting a life insurance policy into a long-term care benefit plan is an option for paying for senior living. Anyone with an in-force life insurance policy can transform it into a pre-funded 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.

It’s reassuring to know there are many tools that might be of help to you. And that’s just the beginning. At PMMA (Presbyterian Manors of Mid-America®), we are a trusted resource and partner for seniors and their families as they seek solutions for their living and care needs. Contact a community near you to learn more and to schedule your personalized tour.