If you’re beginning to research senior living options for yourself or your loved one, you may be wondering how to pay for senior care now and in the future. Whether you’re ready to downsize and simplify your life in an independent living community, or you’re researching assisted living options for a loved one, knowing the associated senior living costs and how you’ll go about paying for senior care is an important subject that should not be ignored.
Senior living costs and assisted living costs not only vary state by state, but also depend on the type of community in which you wish to reside. Paying for senior care can be accomplished several different ways, and are usually based on your current needs and financial status.
Here are just a few of the options available for paying for senior care:
In general, most forms of private health insurance follow the same rules as Medicare; meaning that if they do pay for long term care services, it’s usually only for short term, skilled care when it is medically necessary, like for hospitalization after an injury or illness. In other words, your current health insurance plan probably covers only very limited and specific types of long term care.
Long Term Care Insurance (LTCI) is separate from your current health insurance policy, and it covers long term services that may not be covered by private health insurance. In most cases, LTCI will cover skilled nursing care and assisted living costs, as well as respite care, hospice care, and memory care. Just note that it’s generally easier to purchase LTCI before any health conditions arise, and most companies will not cover people with preexisting conditions.
If you have a life insurance policy, you can choose to convert it into what is called a Long Term Care Benefit Plan instead of allowing your policy to lapse or be surrendered. This is ideal because there are no wait periods, and all health conditions are accepted. If you have a Term, Universal, Whole or Group Policy with a death benefit of $50,000 up to $1 million, it can be converted into a Long Term Care Benefit Plan to start covering senior living costs immediately.
If you have enough income and savings, paying for senior care or long term care privately is an option for some seniors. Paying privately can also include utilizing your home equity through a Reverse Mortgage, which is a special kind of home equity loan that allows you to receive cash against the value of your home without selling it. Or, you can enter into an annuity contract with an insurance company to help pay for senior care. There are also certain trusts, like Charitable Reminder Trusts or Medicaid Disability Trusts you can utilize.
At the end of the day, there are a lot of different payment options for senior living available to you or a loved one when considering the next step in life’s journey. As with everything the earlier you start planning for future senior living costs, the better. For more information on the different payment options available at American Senior Communities, contact us today.