Common Questions about Financing Senior Living

If you or an aging loved one is considering moving to senior living, you probably have questions about how to cover the costs. Keep in mind that when you factor in all the included services and amenities from landscaping and snow removal to transportation, your loved one’s living costs may not increase by much.

Let’s explore the options and let Five Star Senior Living answer some of your most common questions about financing senior living.

Will Medicare pay for senior living?

Adults ages 65 and older can use Medicare to pay for up to 100 days of skilled nursing and rehabilitation following a hospital stay, but not for assisted living or independent living in a senior community.

How do most people pay for senior care?

Most people—90 percent—pay for senior living through private pay options, which means they receive no government benefits or assistance to cover the cost.

For instance, older adults may use the sale of their home, a reverse mortgage, an annuity, a 401K retirement plan, or other investments to pay for senior care. They might rent their home and use that money to cover the costs of senior care.

Long-term care insurance might be a viable option. Many policies aren’t just limited to nursing home coverage. They also cover home care and assisted living care.

Can I use my life insurance to pay for senior living?

Yes! Organizations like Life Care Funding provide the means to do exactly that. You can cash in your life insurance policy to fund your senior living costs. While you won’t receive face value, you typically net more than the policy’s surrender value.

Alternately, you may consider converting your life insurance policy into a deferred annuity with a long-term care rider. Money will be withdrawn monthly, tax-free and without IRS penalties, and paid directly to the senior community.

Talk with a qualified financial advisor or elder law attorney to learn more.

What is a Reverse Mortgage?

If you own a home and are reluctant or unable to sell, a reverse mortgage taps into your home’s equity to pay for senior care while allowing you to keep your real estate.

Older adults over the age of 62 may qualify for a reverse mortgage. Your financial planner can help you explore this option.

I’m waiting for my home to sell. How can I pay for senior living in the meantime?

A number of creditors today offer “bridge loans” to older adults who need to pay for assisted living. These interest-only loans tap into a home’s equity to pay senior living expenses until the home sells. Then the borrower pays off the loan with money from the sale of the house.

A bridge loan offers several benefits, as the finance company might work with real estate agents and home staging companies to expedite a fast sale at the right price.

I’m a U.S. veteran. Can I get any help paying for senior living?

Many people aren’t aware that U.S. wartime veterans may qualify for the Aid & Attendance benefit for veterans and their surviving spouses. This monthly benefit is in addition to a veteran’s regular pension and can help cover the costs of assisted living or nursing care.

I am on Medicaid. Will it pay for senior living?

In some states, Medicaid may pay a portion of assisted living costs for eligible seniors. If you have no other assets and limited income, it’s worth looking into Medicaid as an option to pay some of your senior living costs.

Have more questions about financing senior living?

Let the expert advisors at Five Star help you find the financial means to enjoy a comfortable, low-stress lifestyle.