An assisted living facility usually costs between $3,000 and $5,000 a month. While some medical care can be covered by Medicare and Medicaid, the majority of the costs associated with assisted living are paid for privately out of pocket. So, the question arises: “How can I afford for assisted living?” There are actually many different ways to cover this expense.
First, let us say that if you have already chosen an assisted living facility, ask if they have a financial concierge. This service will provide you, free of charge, planning that will help you find the money to afford residence there. These services are experienced in finding the money and can save you time and money as you plan the move.
There are basically two kinds of insurance policies that can be used to pay for long-term care. One is a life insurance policy. Whole life insurance policies are often mature at about the person’s retirement age. A whole life policy lasts for your “whole life” and is for a certain amount. That insurance is yours as long as you have maintained the payments. Once the payments are complete, the policy is considered “mature.” Contrary to most assumptions, some life insurance can be collected before death. A whole life policy actually has a cash value, and you can buy it back from the company. Check with your insurance agent to see what your options are. A term life insurance policy is one that has a time limit and has to be renewed. These do not accumulate cash value.
The whole life policies can be cashed in for up to 75% of the value. Each company has different policies regarding a cash-in. If their policy is not generous enough, or if they won’t let you cash in unless you have a terminal illness, you can often sell the policy. There are companies that will buy the policy. They will do this even with policies that are not mature, giving you a percentage of the cash value and continue paying the premiums themselves.
If you don’t have a life insurance policy to cash in, you may have a long-term care policy. Some of these are for assisted living facilities only, while others may specify home care. Most of the time, you will have to ask your insurance company repeatedly to pay up. Some of the companies count on people giving up after being declined the first time. In these cases, the assisted living facility should have advocates on staff who can go to bat for you.
To qualify for your long term care insurance payments, you will need to be evaluated as needing help with ADLs, or activities of daily living. In general, this type of insurance will pay from between $1,500 to $9,000 each month.
VA benefits will pay for residential care. It pays even better if you received a disability or were injured while serving. There are, however, another set of benefits available to veterans and their disabled or poor family members. It is the “Non-Service Connected Improved Benefit” benefit. The veteran, in order to receive these benefits, must have served 90 days of active duty with at least one day of service during wartime. You have to meet medical qualifications, too, but the medical condition does not have to be the result of service.
To collect the monies available for this benefit, the veteran or the surviving spouse may need to reallocate assets. Application for the benefits is with the Veteran’s Administration.
For people who hope to keep a home in the family, a reverse mortgage may not be the best choice. However, it can mean that you can afford assisted living while still living in your home, or while your spouse continues to live there. You get a loan against the equity in your home, and use that to pay for assisted living costs. The loan does not have to be paid back until the home is empty, at which point, it is usually sold.
This is a new type of loan that has been developed specifically for the move to assisted living. They are usually sought out by people who are selling property, but who are ready to move into an assisted living facility. The loans are available for as much as $50,000, and are paid back by the sale of the property. Make sure the interest rates are humane, and there is no penalty for early repayment.
To learn about assisted living options and find providers in your area, call 844-472-2323 to talk with a Grace Specialist today.