Seniors Reviewing Assisted Living Options

Insurance Options for Paying for Assisted Living

December 06, 2022

Knowing the options available to you for funding assisted care can take a lot of uncertainty out of the future, as well as remove some anxiety you might be feeling right now. Everyone’s situation is different, which is why having some knowledge of the resources that might work in you plan is a great idea. With a little homework, you can make exceptional retirement living in Beverly, Massachusetts, a reality for you or your loved one.

Funding Assisted Care: Understanding the Need

  • In the United States, someone turning 65 today has almost a 70% chance of needing some type of long-term care in their remaining years.
  • Women typically need 3.7 years of care, while men need 2.2 years.
  • Medicare will only play for long-term care if you need skilled services or rehabilitative care for up to 100 days in a nursing home, or a short period of time with skilled home health or other skilled in-home services.

And even if you are part of a couple, it’s not wise to assume that if one of you needs assistance, the other will provide it. That may not be possible if both of your require the care at the same time, or if your partner is frail and cannot care for you, or if a spouse does act as caregiver, but suddenly needs assistance.

Rather than sit and speculate, consider how these sources for funding assisted care might be of help.

Long-term care insurance- The best time to purchase long-term care insurance is before it’s needed. This type of policy can cover home care and home health care services, assisted living, adult day care, respite care, hospice care, nursing home and Alzheimer’s facilities. Be sure to get facts about waiting periods, benefit periods, and maximum cap on benefits paid. Rates can vary significantly from one insurer to another. Check with your broker for full details.

• Life insurance- This might be one of the lesser-known sources of funding assisted living care: converting a life insurance policy into a Long-Term Care Benefit Plan. The value of your policy is deposited into in irrevocable benefit account that is FDIC-insured. You designate a care provider, and automatic payments are made from the account directly to the provider. If the amount of your payment needs to change, it can be adjusted. If you will be using this method to pay for assisted living using life insurance conversion, It’s best to wait until there is an actual need for care first. 

• Veterans benefits- Wartime Veterans or a surviving spouse with limited income may be eligible to receive a non-service-connected pension to assist in paying for long-term care such as assisted living, home health care, adult day care, or skilled nursing. Surviving spouses must have been married to a Veteran for at least one year. You must have been married to a Veteran at time of death. You must present your Veteran spouse’s death certificate.

You may apply for Aid & Attendance or Housebound benefits by writing to the Pension Management Center (PMC) that serves your state. You may also visit your local regional benefit office to file your request. However, you might consider enlisting the services of a VA accredited agent, as the application process can be quite challenging. An expert who knows the rules and regulations, as well as how the VA works, can ease the process and make sure you get the benefits you deserve. And while the VA may tell you to expect it to take 12 to 18 months for your application to be approved, a VA accredited agent can typically help reduce that time significantly.

• Reverse mortgage- With a reverse mortgage, you can convert part of the equity in your home into cash. Instead of you making monthly payments to a lender, as with a traditional mortgage, the lender makes payments to you, the borrower. You are not required to pay back the loan until the home is sold or otherwise vacated. As long as you live in the home, you are not required to make any monthly payments towards the loan balance.

A reverse mortgage may make sense for people who don’t plan to move, who can still keep up with the cost of home maintenance, property taxes and insurance and those who want to access the equity in their home to supplement income in retirement.

• Savings- Have you put away rainy day funds in a bank account? Do you have stocks, bonds or annuities? You have the option of tapping into your investments when exploring how you will be funding assisted care. However, it’s vital to keep in mind that costs can increase significantly if additional care or resources are required. You also have to plan for unexpected expenses that can occur either for yourself, or others in your family. Be sure to call upon professional guidance before you make a decision about your options for retirement living in Beverly Massachusetts.

At The Herrick House, we know that making a major life transition can be challenging. But the path to change can be made a lot smoother when you have a trusted advisor on your side. We are here to help you with information on funding assisted living in Beverly, Massachusetts, as well as any other topic.

Independence and companionship, with a little help and a lot of caring. Download our free Financial Planning for Retirement Living Guide to learn more about funding assisted living care, or contact us  

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