5 Common Questions about Financing Senior Care

January 22nd, 2019 | Posted by admin in Uncategorized

When it comes to financing senior living, older adults and their families typically have many questions. From the misconception that Medicare will help pay for an assisted living community to overlooking veteran’s benefits, this FAQ guide is designed to provide families with the answers they need.

Answering Family Questions about Financing Assisted Living

Q: How much will a parent’s Medicare benefit pay for assisted living costs each month?

A: This often shocks adult children: Medicare doesn’t pay for any of the costs associated with assisted living communities. The benefit was established to help older adults pay for medical expenses, and assisted living is considered a medical service. Assisted living support is considered custodial in nature, not healthcare-related.

Q: We need to either sell my parents’ home or liquidate assets to finance assisted living. It’s not a great time to do either without losing money. Do banks grant bridge loans to help finance assisted living?

A: Yes, short-term bridge loans can be a great avenue for financing a move to an assisted living community. Many banks and private financing companies offer them to qualified seniors and their families.

For many older adults, their home is their largest asset. Cleaning out the house can take time if the older adult has lived there for many years. Moving before the home is sold is often easier and less stressful for the senior. A bridge loan can be an ideal solution.

These loans can also allow an older adult to wait for the most profitable time to sell investments. In a down or volatile market, that can make a big difference in how quickly and smoothly a senior’s transition can be.

Banks handle these loans differently. Some require the senior to pay only the interest on the loan while waiting for the asset to be sold. Once the asset is liquidated, the borrower will be required to pay the loan off in a lump sum.

Some lenders will split bridge loan payments up among family members. This helps make financing a little more affordable.

Q: My dad has a fairly substantial life insurance policy that he doesn’t need any longer. Can we sell that to help pay his senior living expenses?

A: This is worth considering. This type of arrangement is referred to as a life settlement contract. By entering into an agreement with a life settlement company, an older adult can sell their life insurance policy to a third party for a lump sum payment.

While the reimbursement won’t be as much as the face value on the life insurance policy, it is usually much higher than the policy’s cash surrender value.

As is true of any financial relationship, talk with an experienced elder care attorney or estate planner for advice and guidance before signing a life settlement contract.

Q: My grandfather was a veteran. We are working on a budget for him to move to an assisted living community. Are there any benefits exclusively for veterans who need help paying for senior care?

A: Another potential source of funding for veterans who qualify is the Veterans Aid & Attendance benefit. Unfortunately, seniors and their families aren’t always aware of this program and miss out on financial assistance. If the veteran meets the qualifications, they or their spouse can receive monthly awards up to:

  • Married veteran:                                                       $2,127 per month
  • Married veteran (spouse needs care):                     $1,408 per month
  • Single veteran:                                                         $1,794 per month
  • Surviving spouse (no dependents):                         $1,153 per month

The staff at your local Sunrise Senior Living community can help you learn more about this benefit and the application process.

Q: Does Medicaid help finance assisted living communities, or just nursing homes?

A: The answer varies depending upon the state in which the senior resides. Currently, states and the District of Columbia have funding available in some form to help finance assisted living or other forms of non-nursing home care.

Our best advice is to call your state’s Department of Aging to learn more. They may also be able to provide a list of assisted living communities that accept Medicaid or another form of public assistance.

Talk to a Senior Living Expert

We know the ins and outs of financing a move to senior living can be confusing. If you have more questions or need assistance establishing a realistic budget for a loved one’s care, we encourage you to call Elderlife Financial at 866-506-4244 and mention Sunrise for complimentary information on your avenues for financing senior care.  

If you would like more information about assisted living options available to you, call the Sunrise community nearest you to schedule a private tour and learn more!

Source: Sunrise Senior Living

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