How Does One Pay for Assisted Living?

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Having to pay a fixed amount every month when you are no longer earning can be scary. Read the article below to understand how does one pay for assisted living on  a fixed income

The cost of assisted living may seem overwhelming at the beginning. When the cost of home care or nursing home is compared with the cost of the assisted living residence, assisted living is a convenient and affordable option. In case you don’t need care services or medical supervision regularly, then assisted living is one of the best options. When you think about assisted living, the next thought that comes across everyone’s mind is how does one pay for Assisted Living. 

The below article will answer your questions, so read further to know more.


Ways to Pay for Assisted Living


In What Ways Can We Pay For Assisted Living Care?

Below are some options in case you are thinking about how you can pay for assisted living

Life Insurance 

Why should you even have a second thought when you have to take care of yourself. Even though you invested in life insurance thinking about a beneficiary, you can still use it for yourself. You can use this policy for your living benefits to lead a comfortable life.

Most insurance companies may buy back their policies for 50-75% based on the face value, which is based on the monthly premium of policyholder, health, and age. Though certain policies may not have flexible terms and may offer living or accelerated benefits in case, the policyholder has a terminal illness.

There is a scope to explore some options in case your policy does not give living benefits. One option which you can choose is “life insurance conversion program” or “life assurance” benefit.

Such options will allow you to convert the policy benefits into care payments that are long-term. Conversion of life insurance may pay less than when compared with a life settlement. This is basically between 15-50 percent of policy value which is available for those policies having less value which may not give life settlement.


Life Insurance


There is scope to sell the policy to a third-party company to get a “senior settlement” or “life settlement” that is 50-75 percent of policy value. Once the company purchases it, it is their responsibility to pay the premiums monthly, and they become the beneficiary. And policy’s full value will be given to the third party once the holder dies.

Life insurance settlement or life settlement will help convert a life insurance policy into money that can be used for paying long-term care services. The policy is purchased for cash payment by the third party, which is more than the policy’s surrender value, but this is lesser than the amount of death benefit.


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Benefits for Veterans 

These benefits of a veteran will help in covering the residential care cost’s in the below circumstances: 

In case you or your spouse has suffered disability or service-related injury, you can apply the benefits of a veteran into the assisted living facility costs.

You can use the attendance and aid benefits that are available for the spouse or disabled veteran; the income is generally less when compared with the stipulated amount.

To get the benefits of your spouse or you, you will have to go through a veteran’s administration. It is a time-consuming, complicated process, so you should work along with a geriatric planner. These people are updated about the requirements of the system, and they will help you in simplifying the qualifications necessary for the benefits.

There is a scope to check if the senior living community will offer financial concierge services that may guide you in applying for the benefits program.


Veterans benefits


They are mostly up to date with the system requirements and process in place and will be able to help simplify the process of qualifying for benefits.

You can also check whether your senior living community offers any financial concierge services that will guide you through the process of applying for the benefits program.


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Care Insurance- Long Term

If you have purchased long-term care insurance, you can put it to good use in case you need financial assistance for the assisted living residence costs. Most of these policies can be applied to assisted living care. Before this, you need to check on how to get the policy.

You can use the policy amount for the benefit of nursing home care. Evaluation of this is based on physical or mental diagnosis, which will help pay for assisted living. There may be a specific amount for the needs of home care based on these policies. You can use the amount to pay for assisted living facility directly. In case you have not purchased any long–term insurance, then it is late now. 


Reverse Mortgage Form


How can we apply for a reverse mortgage?

There are two conditions for those who apply for a reverse mortgage:

  1. One of the owners should be over 62 and 
  2. the other should be staying in the home.

Before proceeding with a reverse mortgage, it is better if you research the pros and cons of this, as this may not suit everyone. This research is a big commitment as you have to work along with a reputed company. There should be some research in understanding the terms. 

Read the print that has rules regarding mortgage and homeowners insurance, which you should know of because there is a chance of involvement of high fees and some conditions that may make you lose your home.

Using Medicaid

Before you go for Medicaid, you have to assess the finances to confirm if you are qualified for it or not.

If your home income is low or your financial assets or savings are low, then there are chances that you will qualify for Medicaid; this will help in paying for assisted living. You can check this using some online tests.

There is a variation of medical eligibility rules between states, but if you want to qualify, your assets should not be more than $2,000 beyond your car and home. Certainly, some assisted living communities may accept Medicaid beds and Medicaid.

If you want to find residential care options that are long-term near you, then you should check with the local Area Agency on Aging. This will help navigate the signing up process, which is complex for receiving public benefits, or else you can call Government Health Insurance Counselor for a free consultation.


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Private Pay using Personal Funds 

Everyone wishes to pay for the assisted living facility costs using their own savings. This can be using a retirement fund or pension, proceeds from selling a home, or income from stocks. 

You can also cash IRAs or 401(k) plans or personal investments to pay for care. Paying from the pocket is beyond what most people can afford. We do not say these options are not viable, but the costs of care are rising, which may empty your savings in less time.

You can bring your loved ones together and discuss this matter to find a fund that will pay the expenses and serves as a pool of resources, and helps in trading money.

To consider an example, in a family, one or two siblings can handle the driving to medical appointments, and others having less flexible work schedules might help in contributing money. 

If you have a family home that none wants to sell, then siblings who have funds can pay for assisted living with a promise that it will be repaid when the house is sold.

Rent your home

There is an option to rent your home where you can use this rent and pay Pay for assisted living. This may be scary, but you have an option to hire a service that will manage the property for you, and it will be able to generate income that will help with getting into assisted living facilities or costs of skilled nursing care

Have a discussion with the family before deciding on this, because rather than giving it to a stranger, it is better to give it to someone who is known to you. You can make use of financial assistance to cover assisted living costs or other funds sources to apply for assisted living services. 


rent out your home


Before making major financial decisions or taking risks with assets and investments, speak with an elder law attorney or a reputable financial advisor. This will help you in making correct decisions which will prevent you from having any regrets later.

We hope that this article was of help to you. Do let us know which points were useful to you, and do feel free to add suggestions as well! We will love to hear from you!