Managing the Costs of Senior Care: 5 Payment Options You May Not Have Considered
Seniors have different options when it comes to living arrangements, but assisted living is often the best choice when care services need to be included. Assisted living communities provide seniors with activities of daily living help while also giving them the independence they desire.
The biggest advantages of a senior care community like Civitas Senior Living’s include:
- No property taxes
- No lawn or home maintenance
- No expensive home improvement costs
- Chef-prepared meals
- Housekeeping and laundry services
- Passionate care services
- Activities and social events
Despite these advantages of being within a community, it is still hard to accept when you or a loved one needs to move from their home. We understand this journey and know how difficult it can be to get used to a new normal.
However, seniors who wish to age in place often forget about the high costs of modifying the home to accommodate changing mobility needs. One improvement can cost anywhere from $100 to $40,000. And as homeowners, we know that one costly improvement could lead to several!
You, or your loved one’s, money is better spent on personal hobbies, interests, or other ventures, not surprising home modification costs.
But if you are already beginning your senior housing journey and want to find a Willow Park community, how do you handle the costs of care, and who pays for the total price of assisted living? Let’s take a look at how to fund assisted living with various options.
Seniors and their adult children often explore traditional financing options like long-term care insurance and government assistance programs. However, there are also some creative ways to pay for assisted living and memory care that you may not have considered.
Let’s discuss five options for financing assisted living in addition to traditional methods.
Financing Senior Care: Creative Options Explained
1. Reverse Mortgage
A reverse mortgage is a loan product that allows seniors to access their home equity without making monthly payments. The loan is repaid when you sell the home.
While a reverse mortgage can be a good way to access the equity in your home, it’s important to note that it can also be expensive. In addition, if you’re considering a reverse mortgage, it’s important to ensure that you still have enough money to cover your other expenses.
2. Home Equity Line of Credit
Another option for accessing the equity in your home is to take out a home equity line of credit (HELOC).
A HELOC is similar to a reverse mortgage in that you can borrow against the equity in your home without having to make monthly payments.
However, with a HELOC, you only borrow what you need, and you have the option to make payments on the loan if you choose. This financial option is best if you only need a small amount of money and are comfortable making monthly payments on the loan.
3. Life Insurance Policy
If you have a life insurance policy that you no longer need, you may be able to sell it for cash. A few different companies specialize in buying life insurance policies from seniors.
The amount of money you’ll receive from selling your policy will depend on several factors. Selling your life insurance policy is generally only recommended if you no longer need the benefit of it, and if you’re comfortable with giving up ownership of the policy.
4. Bridge Loans
A bridge loan is a type of short-term loan to finance moving into a senior living community.
Unlike a traditional mortgage, a bridge loan is typically paid off in one lump sum. This option can benefit seniors seeking to downsize from their current homes but do not have the funds to pay for a new home and community upfront.
Bridge loans can also finance health care costs associated with senior living. These loans can provide much-needed financial assistance to seniors struggling to pay for their care.
However, bridge loans typically come with high-interest rates and fees. As such, it is essential to carefully consider whether a bridge loan is a suitable option for you before moving forward.
5. Additional Options to Pay For Senior Living
You could consider selling your home and downsizing to pay for senior living. Renting out your home can also offset your monthly assisted living cost. Several options are available; it just takes a little research and exploration to find the right one for you.
Traditional Ways of Paying For Senior Care
Assistance Programs
Many government assistance programs are available to seniors who need help paying for care. These programs offer financial assistance, access to care providers, and other services. The most common programs include Medicare and Veterans Affairs Benefits.
VA Benefits
The Department of Veterans Affairs (VA) provides benefits for veterans and their spouses who need help with daily activities such as bathing, dressing, and eating. To learn more about VA benefits for assisted living, visit their website.
Medicare
Medicare is a health insurance program for people 65 or older and those under 65 with certain disabilities. Medicare does not cover long-term care services like residential care, nursing homes, or in-home care services.
Medicare can cover some personal care services received in an assisted living community with proper documentation from a doctor.
Long-Term Care Insurance
Long-term care insurance is another option to help pay for assisted living. Long-term care insurance policies reimburse policyholders daily for covered services like assisted living, home care, and adult daycare. Most policies have an eligibility age—usually between 50 and 85—and a waiting period before benefits kick in, typically 60 to 90 days.
It is best to begin looking for long-term care insurance early. These policies usually have age restrictions and health requirements. Your loved one may not be able to get coverage with certain pre-existing health conditions.
Can I buy long-term care insurance for my parents?
Yes. You can pay for your mom or dad’s long-term care insurance. One way to ease the burden of caregiving is to purchase long-term care insurance under their name and sign up to be the payor of the policy.
Caring for aging family members can be difficult. Long-term care insurance helps cover the cost of care for family members unable to care for themselves. It is generally less expensive than paying out-of-pocket, and a great way to protect your family and finances.
Keep in mind:
- The cost of premiums will generally increase as the parent gets older.
- The policy’s benefits will usually only kick in if the parent needs a certain level of care. As a result, family members need to weigh long-term care insurance’s costs and benefits before deciding.
Older Adults Have Several Ways to Pay for Senior Care in Texas
There are many different ways to finance assisted living care. Explore your options and choose the one that’s right for your situation. Paying for long-term care doesn’t have to be as daunting as you might expect.
Do some research and talk to an insurance company or financial expert before making any decisions. Ensure you’re making the best choice for the needs of your loved one.
It can be overwhelming to try and figure out what’s best for you or your loved one, but don’t worry; we’re here to help with a Willow Park Financial Planning Guide and individual guidance in partnership with ElderLife.
Contact a senior living expert at Clear Fork of Willow Park to learn personalized ways for you to pay for senior living and care.
