It’s hard to put a price on all of the benefits that come with assisted living. Unfortunately, that price tag is all too real. Sooner or later, families may find themselves in the position of trying to figure out how to finance the cost of senior living.
When researching the price of assisted living, keep in mind the following components that go into senior living:
- Housing expenses
- Cost of care
- Services and amenities
How To Pay for Assisted Living
The price tag doesn’t have to overwhelm you, though. Here are some of the best ways you can finance the cost of senior living with a little out-of-the-box thinking.
- Invest in Long-term Care Insurance
An important step in this whole process is knowing the difference between Medicaid and long-term care insurance. When relying totally on Medicaid, you will be very limited in where you can go. Medicaid will only pay for skilled services provided by medical professionals. As such, that eliminates a lot of senior living facilities.
Long-term care insurance, however, usually covers assisted living, independent living, and memory care in senior living communities. Premiums may be tax-deductible and benefits from tax-qualified plans are non-taxable. When looking at policies that may be right for you, make sure it covers what you’re most looking for in a senior living experience. Also, if you have your eye on a facility already, make sure any insurance you’re considering will be accepted there.
- Look Into Bridge Loans
By a certain time in life, most people have valuable assets to their name like a home. However, the move to senior living may have to happen before these types of assets can be liquidated to recover the investment you’ve put in them.
That’s where a bridge loan comes in to save the day. A bridge loan is a short-term loan used to pay for a move to senior living while you’re still liquidating your assets or waiting for your home to sell. A bridge loan also has a rapid turnaround time which means it’s especially useful if you have an urgent need to move before you can fully secure the financial resources to do it.
- Take Advantage of Your Aid and Attendance Benefit
Any active-duty veteran or veteran’s spouse that is in need of care is eligible for a monthly benefit from the Department of Veterans Affairs. This benefit, known as the Aid and Attendance Benefit, is a payment that is given in addition to a veteran’s regular monthly benefit. This payment can be applied to the expenses of senior living in many cases.
With recent increases, a married veteran can receive over $2,100 a month to pay for senior care while a surviving spouse can receive up to $1,176.
- Leverage Your Life Insurance
Your life insurance benefits are there to help your beneficiaries with expenses after you pass. However, you can actually benefit from your life insurance while still alive, too.
A program known as a Living Benefit program allows you to receive up to 50% of your life insurance policy’s death benefit while still saving some of the benefits for your beneficiaries later. For example, if your coverage is $100,000, up to $50,000 can be advanced to help fund your senior living expenses.
- Investigate Getting a Reverse Mortgage
Once again using your biggest asset – your home – as leverage, homeowners age 62 and over can qualify for a reverse mortgage on their home. A reverse mortgage is a loan that allows homeowners with considerable home equity to borrow against the value of the home and receive funds in a lump sum, fixed monthly payment, or line of credit.
A reverse mortgage doesn’t require any monthly payments on the part of the borrower. Instead, the entire loan balance becomes due and payable when the borrower dies or sells the home.
Lenders will perform a financial assessment to ensure your ability to meet the loan obligations such as continuing to pay for all property taxes. How much you can borrow depends on your age, the interest rate, and your home’s value.
Finding ways to finance your senior living lifestyle doesn’t have to be overwhelming. The professionals and counselors at Elder Care Alliance know the ins and outs of finding adequate financing for all of your senior living needs. Contact one of our experts today to discuss what options may be available to you that you don’t know about yet.