5 Sources Older Americans Use to Pay for Senior Living
Ask any older American and it is a question that is on their mind. If I need it, how do I pay for senior housing and/or long-term care? We take a look at 5 options for doing just that.
- Private Funds
- Government Programs
- Long-Term Care Insurance
- Veteran's Benefits - Aid and Attendance
- Life Settlements
Fact is, most people pay for independent living and assisted living with private funds. They may use personal savings, a pension or other retirement fund, income from stocks and bonds, or proceeds from the sale of a home
Older adults may be eligible for some government healthcare benefits. Caregivers can help by learning more about possible sources of financial help and assisting older adults in applying for aid as appropriate. The Internet can be a helpful tool in this search.
Long-Term Care Insurance
Long-term care insurance covers the cost of long-term care in certain types of care facilities, depending upon the policy. Long-term care policies are sold by private insurance companies (not all insurance firms offer this type), through agents, mail, and various organizations.
Many companies sell long-term care insurance. It is a good idea to shop around and compare policies. The cost of a policy is based on the type and amount of services, how old you are when you buy the policy, and any optional benefits you choose.
Buying long-term care insurance can be a good choice for younger, relatively healthy people at low risk of needing long-term care. Costs go up for people who are older, have health problems, or want more benefits. Someone who is in poor health or already receiving end-of-life care services may not qualify for long-term care insurance.
Veteran's Benefits - Aid and Attendance
If you are a United States veteran or surviving spouse of a veteran, you may qualify for the Aid & Attendance Program and receive monthly benefits to help cover the costs of your senior housing and care.
Aid & Attendance is a Federal benefit that was added onto a need-based pension offered through The Department of Veteran Affairs. It provides benefits for veterans and surviving spouses who need assistance with their activities of daily living and meet specific requirements.
A life settlement is the sale of an existing life insurance policy to a third party for more than its cash surrender value but less than its death benefit. In a life settlement, a policyholder sells his policy in exchange for a lump-sum cash payment. The buyer makes all the future premium payments and gets the death benefit when the insured person dies.
For seniors who find their policy is no longer needed or affordable, a life settlement can be a better option than letting the policy lapse. But a life settlement will bring the seller just a small fraction of his policy's face value.
ALWAYS consult with your financial advisors before making any financial decisions. You can also check out government website: longtermcare.gov for more information.