For many, the time and money associated with caring for aging relatives are nothing short of overwhelming. Financing long term care is a particular source of anxiety and stress. If you have determined that at-home care is the avenue that best suits your family, then you have probably already worried about financing this long term care plan.
Fortunately, the burden of cost can be significantly shifted if your senior has an existing life insurance policy. According to insurance expert and former insurance industry lobbyist Chris Orestis, your policy can be used to pay for senior care including home care, assisted-living, nursing home expenses and even funeral arrangements. “Seniors can legally sell their policy for between 30 and 60 percent of its death benefit value. The money can be put into an irrevocable fund designated specifically for their care,” says Orestis.
Life Care Funding is one company that can help you determine whether your policy can be converted to finance at-home care. "It is important for seniors to know that if they own a life insurance policy, they can convert the policy into a Long Term Care Benefit Plan to pay for any form of senior care. This is an option that most seniors don't know about. In order for them to make an informed decision about a life insurance asset that they own and have already paid for over years of premium payments, they must know about this important funding option," says Don Poole, CEO of Life Care Funding.
In a recent article in The Gilmer Mirror, Orestis offers up more tips on paying for senior care:
• Don’t rely (too much) on Medicaid: Because the government is paying the bills, you are forced to relinquish control over how you’re cared for and by whom. And most likely, you’ll still need to find other resources to pay for miscellaneous care that isn’t covered.
• Consider what you’ve already paid for: Don’t be so quick to abandon a life insurance policy (insurance companies love this- it means they don’t need to shell out a death benefit after collecting premiums for years). If your relative can no longer afford the premiums, policy owners have the option to take the present-day value of the policy while they are still alive and convert it into a Life Care Benefit.
• Before you scramble for other resources: As quoted in the New York Times, the National Consumer Voice for Quality Long Term Care estimates that it costs more than $80,000 a year on average to pay for a loved one’s stay at a nursing home. Before you dissolve investments or seek a loan, consider utilizing a life insurance policy first. Conversions include provisions for funerals, and whatever money is not spent on care goes automatically to policy beneficiaries.
If you would like more information about at-home health care, feel free to download our Guide To Privately Hiring Elder Care Workers.