For most adults who seek long-term senior care, the cost is a key consideration. It is always recommended to plan ahead. However, if your need the care now, there are multiple ways to finance the cost of long-term care through different approaches. It is important to note that most of the time the cost of care is paid for by multiple sources. Here is some information about paying for senior care in Fort Smith, AR.
Personal Funds
Initially, adults pay for it with their own money. They use a combination of personal savings, pension, income from bonds and stocks or other retirement funds. Most of the time, much of home-based care is paid for using personal funds. Friends and family assist by paying for personal care and other services such as food and transportation. However, as the need of the person increases, paid service might be needed.
Even in senior living communities, professional care given is usually almost paid out of their pocket. In addition, many seniors also pay from their pockets to take part in service programs, community-based services and meals provided by the government.
Government Programs
Older adults can be eligible for healthcare benefits from the government. With a help of a caregiver or by researching themselves, they can learn more about possible financial assistance they are eligible to receive. The internet can be a helpful tool in this search.
Private Financing Options for Long-Term Care
On top of government and personal funds, there are several other private payment options adults can choose from. They include long-term care insurance, life insurance policies, reverse mortgages, annuities, and trusts. The best option depends on many factors, including the person’s health status, age, risk of needing care and personal finances.
- Reverse Mortgages
Reverse mortgages are a special type of loan that allows homeowners to convert part of the ownership value of their houses into cash. With reverse mortgages, no repayment is needed until the borrower sells the home, unlike a traditional home plan. Take note that even though there are no medical or income requirements to obtain a reverse mortgage, you must be over the age of 62 to apply.
- Life Insurance Policies
Life insurance policies can help finance long-term care. The policies with an “accelerated death benefit” give patients tax-free cash while still alive. These advances are then subtracted from the amount your beneficiaries receive when you die. If you reside in a nursing home, are terminally ill, or in need of long-term care for an extended time, or have a diagnosis like Alzheimer’s disease, you can get approved for the accelerated death benefit.
- Annuities
You also have the option to enter into an annuity contract to help fund your long-term care services with an insurance company. The insurance company will send you an annuity in exchange for a series or single payment.
Figuring out who pays for long-term care is not a simple question to answer. Who pays largely depends on the financial situation of the person in need of care and the severity of care required. Browse through the list we provided and choose the best options for your situation.
