9 Tips to Finance Long Term Care for your loved one

Mom or Dad may need long-term care. If you are in your fifties, one must look at how you will be paying for long-term care in the future. What do you do, where do you turn to? There are several sources out there that may help you or your elderly loved one with long-term care expenses.

1. Hire a Reputable Referral Agency– specializing in Senior Housing . Agencies can be a big help in negotiating price for their clients. Furthermore, they can save one time because they know the costs / expenses at various facilities and know what your budget is.  Make sure that the referral agency you use is a free one for the consumer. The agency itself gets paid by the providers themselves.

2. The Veteran’s Administration –offers some help for eligible veterans thru their Aid and Attendance and Housebound Benefits Program. Visit the VA website . Those benefits, if eligible, are used for activities of daily living such as bathing, grooming, dressing , etc. It is not there to supplement an independent senior community.

3. Long Term Care insurance–I highly recommend Long Term Care Insurance for anyone that is 60 years old or older. LTC can reimburse residents and their families for some costs with assisted living.

4. Reverse mortgages–A reverse mortgage is a special type of home loan that lets a homeowner convert a portion of the equity in one’s home into care.

5. Life insurance–For those who own a Life Insurance policy, one can consider converting a policy to help pay for care.

6. Viatical settlement is the sale of a life insurance policy by the policy owner before the policy matures. Such a sale, at a price discounted from the face amount of the policy but usually in excess of the premiums paid or current cash surrender value, provides the seller an immediate cash settlement. Generally, viatical settlements involve insured people with a shorter life expectancy. It is a practical way to pay extremely high health insurance premiums that severely ill people with short life expectancy (ex. a person with AIDS) face.

7. Family members take out a loan–Family members can take out a loan to cover expenses for their loved one. Usually this occurs when their loved one needs to enter a facility and there is not enough money to cover expenses initially because the family home needs to be sold or other financial considerations are pending. These loans are typically called Bridge Loans.

8. Medicaid–Many states have a Home and community Based Services (HCBS) waiver that pay for some of the costs involved in receiving assisted living care. This could be a life saver for a resident that has paid privately for one or two years and the money begins to run out. Based on my experiences, it is paramount that one should find out whether the facility a person chooses will accept Medicaid after your money is gone. Ask detailed questions of what will happen when your money runs out before you begin spending your assets at a facility.