Finding the money for care The population of American seniors is expected to double in size within the next 25 years according to the National Institute on Aging and the U.S. Census Bureau. As our aging population continues to grow, so does the demand for both in-home care and residential care facilities. In fact, U.S. News & World Report reported in 2013 that for the next 20 years, about 10,000 baby boomers will turn 65 each day. This means that elder care and retirement planning are crucial to help support an aging population. Three options for seniors and their families to consider are in-home care agencies, nursing homes, and assisted living communities. It makes sense to most people that nursing homes, with their more intensive levels of care, cost more than assisted living communities. What many don’t realize is the elder care costs associated with home care can quickly outpace the costs of assisted living as well. Because home care agencies typically charge by the hour, it will depend on how much care is needed, but the expenses can add up quickly for anyone who needs extensive help. Seniors and their families often opt for independent caregivers because of the cost saving, but it’s important to factor in the value an in-home care agency and understand what they have to offer as screened and bonded trained professionals. Many states require accreditation and licensing for in-home care agencies, whereas there are no such standards for independent workers. Paying for care requires understanding options through research and careful planning. Here are some things to consider:
LONG-TERM CARE INSURANCE
Long-term care insurance (LTCI) helps pay for costs not covered by private medical insurance. This type of plan can help minimize the financial impact of longterm health care needs. In general, long-term care insurance will cover the cost of home care, assisted living, adult daycare, respite care, hospice care, nursing home, and Alzheimer’s care facilities. Most companies will not insure people with preexisting conditions, so it’s easier to buy LTCI before health issues arise.
LIFE INSURANCE POLICY CONVERSIONS
Instead of allowing a life insurance policy to lapse or be surrendered, the owner can convert their policy into
a Long Term Care Benefit Plan. Any type of in-force life insurance policy (Term, Universal, Whole and Group) with a death benefit of $50,000 to one million can be quickly and easily converted into a Long Term Care Benefit Plan that will start covering immediate costs of any form of senior care the policy owner chooses. It is a unique financial option for seniors because it pays for immediate care needs, all health conditions are accepted, there are no wait periods, no care limitations, no costs or obligations to apply, no requirement to be terminally ill, and there are no premium payments. Policy owners have the legal right to convert an in-force life insurance policy to enroll in the benefit plan, and are able to immediately direct tax-exempt payments to cover their senior housing and long term care costs.
KNOW HOW MEDICARE WORKS
Many U.S. citizens are surprised to learn that Medicare is not universal health care for people over 65 and does not cover long-term care costs for seniors. For example, Medicare can cover short-term rehab stays at a nursing home after a hospitalization. It also can pay for rehab and therapy at home for a limited period of time and when prescribed by a doctor. However, it’s vitally important to recognize that Medicare does not pay for custodial care. Medicare should primarily be considered health insurance. This means Medicare does not pay for the following types of senior care: assisted living, long term care at a nursing home, residential care homes, and any long term care.
REVERSE MORTGAGES
A reverse mortgage, also called a Home Equity Conversion Mortgage (HECM), is a type of loan for homeowners over the age of 62 that turns equity saved in a home into cash. When someone secures a reverse mortgage, they are then able to use the money from their home equity while also living in and retaining ownership of their home. There are no restrictions on how you can use the money from a reverse mortgage. Traditionally, the disadvantages of a reverse mortgage are the relatively high closing costs, but if you need money for any purpose, and are concerned about not being able to make the payments on a normal loan, then a reverse mortgage may be right for you. Source: www.aplaceformom.com
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