Affording Long-Term Senior Care
As you age, it can be hard to decide where to live. The elderly often choose to remain at home for as long as possible. There comes a time when they are unable to do all the work necessary to be able to take care of themselves, however. In circumstances such as these, the idea of living at a senior assisted-living community with people your age can seem tempting.
The different types of senior living, and the costs involved
The kind of senior living community that you choose usually comes down to the state of your health, and how much you’re willing to spend. Prices vary not only by the kind of services and amenities provided but also by market. If you choose a community in a major city, for instance, you’ll pay more than you would if you chose a place in a rural area. Senior living communities tend to offer different kinds of facilities. Some are intended for people who are relatively independent and can take care of themselves. Others offer more involved senior care for those who need help with every part of their daily routine.
Continuing care communities offer both kinds of facilities for people who start with independent living, and transition to greater care.In general, assisted living facilities cost anywhere from $2,500 to $5,500 a month. The fee usually covers meals. Sometimes, residents are asked to pay extra for phone and cable. It’s important to ask about information that you are unclear about.
Performing a financial self-assessment
In order to decide what kind of senior living facility may be right for you, you need to first perform a detailed financial assessment to establish what your income sources are. Most people sell their homes to raise money for senior living in a community. Sometimes, families tend to feel guilty about sending their parents off to a facility, and compensate by persuading them to choose a more luxurious seniorcare living community than they can actually afford. This only makes the money run out faster, however.
It’s important to be realistic and you should have complete information about the finance options available to you, especially when a decision has to be reached for you or your loved ones to relocate to a senior care facility for elderly. There are a range of finance options available that can be tailored to suit your needs.
Long-Term Care Insurance
Over 10 million Americans have purchased long-term care insurance. Long-term insurance coverage has appropriately assisted in paying the bills of the elderly confined to a facility. The quotes offered by insurance firms vary but in most cases insurance has been beneficial in providing coverage for home care and also helps protect the individual’s assets./
Some of these policies can be pricey, and can require you to begin paying premiums long before you actually need to use those policies. If you are fortunate enough to have invested in such policy early on, you should take it into account when you perform your financial self-assessment. It’s important, when you do, to remember that some long-term care insurance policies are of the “qualified” variety — you’re only allowed to take advantage of them when you come to need assistance with at least two daily activities, or when you suffer from a condition such as dementia. It can help to invest in a policy that doesn’t restrict your ability to begin taking advantage of it when you need it.
Life insurance is a well-known financial planning tool which can also provide coverage for cost of care. In most cases insurance policies providing life coverage are made flexible in order to also provide coverage for long-term care plan rather than a benefit paid out after the death of an individual. It should be understood that a life insurance coverage is terminated by the insurance firm immediately a cash out is made for the purpose of long-term care.
Commonly used life insurance policies are as follows:
- Universal Life Insurance (UL) which is inclusive of build-up fund and a life insurance.
- Whole Life insurance affords individuals the opportunity to own policyholder coverage for a life time and the cash accrued can be cashed out for the purpose of paying the care bills of the elderly.
- Group Life insurance is provided for the benefits of employees or members of a labor organization. To remain a beneficiary, you must maintain employment.
- Life Settlement involves selling an existing life insurance policy to another person at a value below its net death benefit but reasonably above its cash surrender worth.
You may have the option of financial aid
- Supplemental Security Income (also referred to as Title XVI) is an initiative that gives a monthly check to the elderly, blind and disabled individuals. It is a need based program designed to support only individuals who have worked long enough. Social Disability Insurance provides a low asset limits and income value, but it is the only program initiated to supplement individuals in this group.
If you’re a veteran, the Veterans Affairs Aid and Attendant Care benefit may be an option to you. Once it is determined that your income and asset levels are low enough to get you to qualify, the government pays up to $2,266 / month towards care for you and your spouse.
- Line of Credit is a financial resource designed for retirees. It is provided to pay for care while in expectation of the Veteran Aid and Attendance benefits or prior to the intervention of long-term care insurance firms (It is important that a source of funding is anticipated in the near future before applying for this option).
- Social Security Benefits can be used in addition with other options by the elderly to access funds. It should not be viewed as a bailout to pay for home care services because the fund provided will not suffice.
Ideally, considering the fact that life at a senior living community can be costly, it’s a good idea to begin setting money aside for it the day that you begin working. At the very least, however, you should be able to sell your home to be able to afford the kind of assisted-living that you need as you spend your years in retirement.