If you’re beginning to consider assisted living for a loved one, selecting an option can be challenging. Choosing a suitable living situation depends on various factors, including meeting your loved one’s needs and picking somewhere right for their physical and mental health.
There’s a lot to think about when making the next step in assisted living arrangements for a loved one, including what you can often. How much assisted living costs is a substantial contributing factor to the decisions that are made.
If you’re wondering how to pay for assisted living, we’re here to help. Keep reading to learn some of the best options.
The easiest and most straightforward way to pay for senior assisted living is paying for it with savings outright.
Many people living in assisted living facilities continue to work and use their income to pay for their accommodation.
Others have saved throughout their lives and can use their savings to pay for housing through retirement.
Family members and friends may also help seniors with savings.
2. Life Insurance
There are various ways that life insurance can help cover the costs of long-term care. If your life insurance plan has a cash value, you can access cash through withdrawals to compensate for assisted living care.
A life settlement option is also possible. This option can generate up to three times the amount of cash as accessing money through withdrawals. If the policy owner is terminally sick, the plan can be sold through a viatical settlement.
In a viatical settlement, proceeds from the sale of the policy are typically income tax-free.
3. Long-Term Care Insurance
Long-term care insurance is a kind of insurance policy that compensates assisted living residents a daily amount of money for help with activities of daily living (ADLs).
Policies should be bought ahead of needing care.
Receiving benefits will be decided by a health assessment completed by a nurse or social worker.
They will decide if you or your loved one requires long-term care or not.
If approved, your care manager will put forward a Plan of Care that will inform you of your coverage.
4. Hybrid Annuities
A hybrid annuity teams long-term care within an annuity enabling you to make various payments or a single payment to an insurance company. This is for a fixed annuity that includes a long-term care rider.
You’ll receive monthly income spread across a specific number of years or for the rest of your life. Annuities are bought from insurance companies. A hybrid annuity might be suitable for you if you’re looking for a predictable and guaranteed income source in the future.
Medicare assisted living can help pay for the medical care for those over 65, people with certain needs under the age of 65, and medical care for people of all ages who have end-stage renal disease.
Unfortunately, Medicare doesn’t usually cover long-term care costs. They will cover a percentage of fees for a shorter stay in a skilled nursing facility and hospice care if specific conditions are met.
6. VA Benefits
Qualified United States military veterans may use their benefits to fund long-term care in assisted living facilities.
Veterans may be suitable via standard medical benefits for a health evaluation, respite care, adult day health care, and skilled home health care.
Veterans may also be eligible to use disability pay, and their veteran’s pension to pay for long-term assisted living care. Find out how to access these long-term care services by visiting the U.S. Department of Veterans Affairs website.
Medicaid helps people with low salaries afford medical care. It’s a federal and state-run program. Once your state concludes your suitability, Medicaid can work out your eligibility for long-term assisted living care coverage.
Medicaid covers personal care services, home health care, and long-term stays in senior communities.
Suitability and coverage vary depending on where you’re based and what your needs are.
8. Working With Real Estate Assets
There are two popular ways to use real estate assets to cover long-term care, including residing in assisted living homes.
The first is known as home equity or real property value. This is the market value of your home, less the balance of all liens on the home.
For example, if you purchase a property for $200,00 and make a 20% down payment on it, the home equity is $40,000. This is 20% of the total cost of the property.
As the value of the property rises or falls, so does your home equity. Home equity loans enable the borrower to take a loan against their home equity, and then they can use the cash to pay for long-term care services like assisted living.
The second way to use real estate assets to pay for long-term care is a reverse mortgage.
This is like a home equity loan in that borrowers can use all or some of their home equity as cash. However, it’s only available to people over 62 and doesn’t require monthly payments.
The loan doesn’t have to be repaid until the property is sold. In this kind of loan, the lender would pay the borrower a monthly amount of money, hence the name ‘reverse mortgage.’
Are You Ready To Pay for Assisted Living?
If you’re looking for ways to pay for assisted living, there are plenty of options. Consider the eligible and suitable options for you or your loved one and think about the requirements you’ll need for residing in an assisted living community.
Here at Brooking Park, we have plenty of assisted living services to suit you or your loved one. Learn more about what we have on offer here.
In research mode? Download our free Assisted Living Resource Guide.