The good news is that senior housing in an assisted living facility or adult family care home is a lot less expensive than you might think – especially when you compare these costs to long term care or nursing homes.
Depending on the level of care and amenities, you can expect to pay $3,000 – $8,000 per month for assisted living, compared to $10,000 and up for a nursing home or long term medical care facility. Many people initially think there is no way to afford assisted living, but there are many ways that families can come up with the resources to help with senior housing expenses:
Veterans Benefits: If your loved one (or your loved one’s spouse) was a veteran, you may find you have some great assisted living benefits. Veterans benefits can be used to pay for residential care in a variety of situations. One set of benefits is available to those with service-related injuries or disabilities; another set of benefits, known as Aid and Attendance, is available to any veteran or surviving spouse who’s disabled and whose income is below a certain limit. To qualify for and access these benefits, you’ll need to go through the Veterans Administration, which can be a tricky and time-consuming process, but we can connect you with good resources.
Life Insurance: Many seniors purchased life insurance with the intent to provide support to those left behind. But a life insurance policy can also provide financial support now, if that’s when the money would be most helpful. To cash out a policy, ask your life insurance company about “accelerated” or “living” benefits. Commonly, the company that originally issued the policy buys it back for 50 to 75 percent of its face value. The amount is decided based on the policy amount and monthly premiums as well as the policyholder’s age and health. Different rules may apply depending on the company and type of policy. For example, some policies can only be cashed in if the policyholder is terminally ill; others are much more flexible.
In the event that the company that issued the policy won’t cash it in there may be external resources, like a life settlement company that buys policies in return for a “life settlement” or “senior settlement,” which is usually a lump sum of 50 to 75 percent of the policy’s face value. After buying the policy, the settlement company pays the premiums until the policyholder dies, at which point the company, rather than the policy’s original beneficiaries, receives the benefits.
Long-term Care Insurance: These policies can apply to assisted living care. Some long-term care policies have a specific designated benefit for nursing home care, based on a mental or physical diagnosis, which can be used to pay for assisted living. Or the policy may set a designated payment for home care, which can be paid directly to the assisted living facility or to the beneficiary, who then uses it to pay for assisted living.
Annuities: If you have a nest egg but you’re concerned about outliving your resources, an annuity may be a good option. When you purchase an annuity, you pay a lump sum up front — and receive regular payments back over a promised period of time, usually the rest of your life. An annuity can help you stretch your budget and be sure that you’ll always have at least some money coming in even if you live longer than you expect. However, annuities can be a complex solution. It is important to approach them with caution.
The Family Home: If the family is not ready to sell Mom & Dad’s house, it can still serve as a resource to help pay for assisted living. Renting it out would allow the family to maintain ownership while creating income to help defray the costs of maintenance and pay for care in an assisted living facility or adult family care home.
We can help you consider the financial options as well as helping you find the right living situation for your loved one and there is never a fee to the client for our services.
