Financing Options for Seniors & their Families Planning for Long-Term Care

Pay for Long-term care

"Nearly 90% of people over age 65 indicate they want to stay in their home as long as possible, and four of five in that age bracket believe their current home is where they will always live," says AARP. While others in that same age group move to another country where long-term care is reasonable quality and less costly. But for others, options like assisted living and residential care can suit their needs the best.

In any case, older adults are usually left to their own financial resources to pay for senior care.

The government can help if one becomes dependent financially in the state - this is known as the Medicaid program. For those who served their country, the Veteran Aid and Attendance can provide assistance. Still others may rely on private sources that they can turn to for help covering the costs of long-term care.

Financing Options for Long-Term Care


Family caregivers offer older relatives the opportunity to age in place by giving informal care. About 44 million Americans provide 37 billion hours of unpaid, "informal" care each year for adult family members and friends with chronic illnesses or conditions.

Families handle the daily activities like bathing, managing medications or preparing the meals with women, in particular, providing over 75% of the support. Today, the value of families' unpaid contributions is estimated over $450 billion, which is how much it would cost to replace that care with paid services.

Long-term care support and services usually come from unpaid caregivers, but there are more options to choose. If a person has no family to count on, they can remain at home by hiring outside help. It's best to work with reliable options that put caregivers, through a rigorous screening process that includes an entrance exam, in-person interview and reference check from past employers. When selecting home care help to come into your - or a loved one's home - you want to find an agency or organization that takes the safety of clients very seriously.

Life Insurance

Life insurance is a common financial and estate-planning instrument commonly used to help cover the costs of care. Some life insurance policies can convert from a product that pays out a benefit after the death into a source of funding for long-term care plan. It's important to note that if a life insurance policy is cashed-out for this purpose, the coverage cancels and the individual is no longer insured. The most prevalent types used for this purpose are:

• Universal Life Insurance (UL) combines term life insurance and a build-up fund account.

• Whole Life Insurance gives a policyholder coverage for the whole life and its accumulated cash is withdrawn to help pay for senior care expenses

• Group Life insurance offered by an employer or a labor organization to its workers or members. You must maintain employment or membership status to keep it enforced.

• Life Settlement is a sale of an existing life insurance policy to a third-party for more than its cash surrender value but less than its net death benefit.

Other Financial Options

• Section 8 Housing is the federal (U.S. Department of Housing and Urban Development (HUD) government program that provides housing for Americans living in poverty.

  • Low-Income Families
  • Elderly
  • Persons with Disabilities

It allows them to rent safe, moderate, and affordable housing in a community. The official name is Housing Choice Vouchers Program.

• Supplemental Security Income (SSI also known as Title XVI) is a needs-based program that provides a monthly check to persons who are blind, elderly, or disabled. For those who haven't worked enough or not at all in the recent years may not qualify for SSDI (Social Security Disability Insurance). SSI is the only program available - but it has very low-income and asset limits.

• Medicaid pays for certain health services and nursing home care for individuals with low incomes. Medicaid also pays for some long-term care services at home and in the community. The beneficiaries must meet certain asset and income limits before receiving benefits. Eligibility varies from state to state and restrictions apply to transferring assets to heirs.

• Line of Credit is a financial resource for retirees. It's used to pay for care while waiting for the Veteran Aid & Attendance benefit to arrive, or even before Long-term care insurance kicks in. (Before one applies for this option, check to be certain a funding source will follow in the near future.)

• Social Security Benefits are a source of funding for most seniors but will likely need to be is used in addition to other resources. You shouldn't rely on the benefits to pay the assisted living or home care expenses because the average check amount is $1,230 for a retired worker and $2,045 for a couple. Neither is enough to pay for care.

• Part-time Job is a good source of additional income to help pay for senior care down the road. List of the top companies that hire older workers.

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