One helpful guide is the Genworth Cost of Care Survey. Since 2004, Genworth has been creating and sharing this information. According to their most recent study, the cost of senior living has not increased as much as the cost of in-home care. Private duty home care costs continue to rise every year.
Tom McInerney, president and CEO at Genworth, says that at least 70 percent of Americans over age 65 will need some form of long term care services and support during their lives. With a little bit of planning, financing senior living might be a little less difficult than you think.
Financing Senior Living
The cost of senior living varies depending on your geographic location and the extent of the care a loved one requires. But there are several different options available for financing senior living, regardless of your aging loved one’s location and level of care.
- Private Pay: If your family member has sizable savings but is worried about outliving their resources, you may want to consider an annuity. When you purchase an annuity, you pay a lump sum to the underwriters and then receive regular payments over a specified time period (usually the rest of your life).
- Veteran’s Benefits: The VA (Veteran’s Administration) can be very generous when taking care of those who served. If your loved one is a veteran, they may be eligible for benefits that can be used to help pay for senior housing.
The veteran must have served at least 90 days of active duty and/or at least one day during wartime. Their medical condition doesn’t need to be service related, but they must meet a medical qualification.
The current maximum benefit is $1,949 a month for married veterans, $1644 for single veterans and $1056 for a surviving spouse. You can help them apply through the Veteran’s Administration.
- Long-Term Care Insurance: If your aging loved one has a long-term care insurance policy, it may help cover the cost of assisted living services. There are “facility-only” policies which cover care only in a licensed assisted living facility or skilled nursing facility. Insurance policies can be tough to read, but knowing what benefits your loved one is entitled to receive will be very helpful in making sure they get what they paid for.
Most companies are written so they require a senior to need help with at least two ADL’s (Activities of Daily Living), such as bathing, eating, dressing, transferring from bed to chair, walking, and toileting. Long term care insurance benefits vary widely depending on the policy, but can range from $1,500 to more than $9,000 per month.
Don’t be discouraged if you are turned down. It isn’t uncommon for insurance companies to decline payment on the first round. It often means you or a professional advocate must contact the insurance company to appeal.
- Life Settlement Funds: When we think of life insurance benefits, it is common to think that the funds are not available until the person’s death. But a life insurance policy can provide financial support now, should your aging family member need the money.
Your senior loved one can sell their existing policy to a third-party company in return for a "life settlement" or "senior settlement." This is usually for an amount equal to about 50 to 75 percent of the policy's face value.
Get the Most From Your Care Coverage
Understanding your options can help ease the burden of financing senior care. Doing additional research may also help you discover creative ideas for lowering the cost of senior living, such as family caregiver tax breaks, respite care and low cost or free medications.
Find a Five Star senior living community and schedule a tour. Our experienced team members will be happy to discuss your options for financing care.