5 Ways to Pay for Assisted Living
Posted by Donna Mae Scheib on April 11, 2017
5 Ways to Pay for Assisted Living
Learn about financial resources that can cover the costs of assisted living.
Choosing an assisted living home and helping your loved one transition to life in an assisted living facility can be a taxing time, both emotionally and financially. Many people who need senior care services put it off because they are unsure of how they´ll pay for it.
On average, the cost of renting a one-bedroom apartment in an assisted living community is $3,500, according to Genworth Financial. In some regions it’s even higher. Many families are understandably concerned about how to pay for assisted living. The following are some tried-and-true ways that families can cover the costs of senior care.
1. Income and savings
The simplest method for paying your assisted living costs is to pay for it out of pocket with your own income and savings. However, an average price tag of $3,500 per month is more than most seniors can pay themselves, especially considering that the typical assisted living resident has an annual income of approximately $19,000.
2. Use veterans benefits
If you, your loved one, or your loved one’s spouse was a veteran, you can use veterans benefits to pay for residential care. In order to get access to these benefits, you must go through the Department of Veterans Affairs (VA).
3. Long-term care insurance
For those who are unable to pay for assisted living costs with income, private insurance, or Medicare/Medicaid, long-term care insurance can help to bridge the gap. Long-term care insurance needs to be purchased when you’re middle-aged or in your younger years. If you don’t already have coverage, getting covered in the later stages of life would be prohibitively expensive.
4. Life insurance policy
If your aging loved one has a life insurance policy, you might think that it can only be used to support your loved one’s family after his or her death. However, a life insurance policy can actually be used to provide financial support for your loved one now. You can cash out a life insurance policy by obtaining “accelerated” or “living” benefits. This typically means that the life insurance company will buy the policy back for 50 to 75% of its face value. Another option is to sell the policy to a third-party company.
5. Reverse mortgage or home rental
Borrowing money based on the equity of your home can be helpful to seniors who need to find a way to pay for assisted living. You have to pay the money back when you sell the home or move out. Alternatively, you might consider renting out your home or that of your loved one to create the income needed to pay for assisted living.
Making the decision of how to pay for assisted living and choosing the right facility can be challenging. Having resources to refer to can help. Senior Living Link connects people with senior living facilities and service providers around the country. We provide unbiased information about senior living facilities in your local area, so you can research, compare, and contrast different communities and narrow down your search. Find a senior living community near you!