Learn how to pay for assisted living. Senior Sanctuary guide for financial aid for Senior living and assisted living needs.




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Welcome Funds: Life Insurance Settlement Broker

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For more information about financing options, life and viatical settlements, visit Welcome Funds, a Life & Viatical Settlement Broker..

Paying for Assisted Living

Because assisted living services can be tailored to meet the service requirements of the each individual, the cost of assisted living has remained relatively low as compared to other long term care options. Most facilities cost between $50 and $120 a day. The cost depends on the service needs of the resident, size of the living unit, location of the facility, and amenities offered. Currently, most assisted living services are paid for by private funds.

Medicare

Generally, Medicare doesnt pay for long-term care. Medicare pays only for medically necessary skilled nursing facility or home health care. However, certain conditions must be met for Medicare to pay for even those types of care. Medicare specifically will not pay for custodial and non-skilled care.

Medicaid

Medicaid is a government program that will pay for certain health services and nursing home care for older people. In most states, Medicaid also pays for some long-term care services at home and in the community. Eligibility and covered services vary from state to state. Most often, eligibility is based on income and personal resources.

Long Term Care Insurance

This type of private insurance policy can help pay for many types of long-term care, including both skilled and non-skilled care.

Long-term care insurance coverage can vary widely. Some policies may cover only nursing home care. Others may include coverage for a whole range of services like care in an adult day care center, assisted living, medical equipment, and formal and informal home care.

Long-term care insurance premiums vary, depending on your age and health status when you buy the long-term care insurance policy and how much coverage you want. Additionally, you must be in generally good health to pass underwriting when purchasing a policy. For this reason, it may be better to buy long-term care insurance at a younger age when premiums are lower. If this is done, a periodic review is advised to make sure your policy covers your current and future long-term care needs. But you can buy long-term care insurance at any age. Talk about this with a family member, insurance agent, or financial advisor to learn what is best for you.

The cost of care, especially in nursing homes and assisted living facilities, varies from state to state. Make sure that the long-term care insurance policy you buy will cover the costs of care where you plan to use it.

Most long-term care insurance policies offer certain tax benefits. These policies are called Tax-Qualified, or TQ, policies. Depending on your age, you can include some or all of the premium for a TQ policy as a medical deduction on your Federal income tax form if you itemize your deductions. Also, when you receive payments from a Tax-Qualified policy, you generally dont have to pay Federal tax on them.

Private insurance companies sell long-term care insurance policies. You can buy them from an insurance agent or through the mail. Or, you may be able to buy a group policy through an employer or through membership in an association. Insurance companies may let you keep coverage after your employment ends or your employer cancels the group plan. You may be able to continue your coverage or convert it to another long-term care insurance policy.

Home Equity

A reverse mortgage is a special type of home loan that lets a homeowner convert a portion of the equity in his or her home into cash. The equity built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence. HUD's reverse mortgage provides these benefits, and it is federally-insured as well. To obtain a HUD-insured reverse mortgage you must be 62 years of age or older; own your home outright, or have a low mortgage balance that can be paid off at the closing with proceeds from the reverse loan; and must live in the home.

For more information about a reverse mortgage, visit the U.S. Department of Housing and Urban Development.

Life Settlements

A life settlement means you can sell your life insurance for the present value of the policy. This is usually done when the original reason why you bought your life insurance policy no longer exists. For example, you have a life insurance policy and you get divorce. You might be able to sell the life insurance policy for present value. The money from the sale can be used to pay for your long-term care needs.

To be eligible for this, you cant be ill and must be over age 70 (for females) or over age 74 (for males). In some situations, if your life expectancy is 12 years or less, a life settlement can be made at a younger age.

Viatical Settlements

If you are terminally ill or chronically ill, you might be able to sell your life insurance policy to another person (a third party). You usually have to sell your life insurance policy for a lower amount of the full face value. The amount that is paid is usually based on the remaining life expectancy of the insured (you). The death benefit usually ranges from 50 percent to 80 percent. When you die, the third party will get the full death benefit.

Before making a final decision to make a viatical settlement to pay for your long-term care needs, you may want to contact your State Attorney General Office or your State Department of Insurance.