The cost of assisted living has really gone up and for many seniors and paying for long-term care is a concern. Did you know that you can use insurance to cover the cost of assisted living or the nursing home costs? According to Senior Living Help, many seniors do not read the fine print and are not aware of what their insurance will pay. For others, they are not aware of what insurance can be used for assisted living. In this article, we feature forms of insurance for the senior living. Seniors can go for either of these policy types to pay for assisted living or the nursing care cost.
Long-Term Care Insurance
The long-term care insurance policy is separate from whole life or term life insurance products. It is a product that can be used to cover the cost of staying at a nursing home when your Medicare does not cover this type of cost. Long-term care insurance can be purchased privately, or for those that are yet to retire, their employers can offer long term insurance as a package.
It is always advisable that the long-term care insurance is purchased early enough when one is healthy. While one is healthy and working, the premiums for long-term care are lower and therefore the insurance policy is much more affordable. However, after retirement, the premiums are much higher as this is the time when the person is at a higher risk of needing long-term care. The benefit of purchasing long-term care cover early enough is that it reduces your tax liability.
Apart from the premiums factor, if you try to purchase long-term care insurance in your later years, you might be denied coverage. Coverage is based on your age and health. Before purchasing long-term care insurance products, ensure that you understand the type of care covered by the product. Make sure to read the fine print. Choose carefully and purchase coverage from a reputable company.
Paying For Senior Care through Accelerated Death Benefits Cover
Accelerated death benefits provision allows seniors to borrow against the death benefits on their life insurance policy. The accelerated death benefits coverage is only usable if you have a terminal illness, are in need of nursing home services, or you need assisted living care permanently. When you borrow from accelerated death benefits plan, make sure you keep the life insurance policy current and all premiums are paid. Compared to the long-term care insurance, the accelerated death benefits coverage pays a lower amount and doesn’t offer inflation protection.
Paying For Senior Living Care from a Life Settlement Policy
There are life insurance policies that allow seniors to sell their current life insurance policy at the present value. However, before you go this route, you should exhaust all other options. This is because if you cash out from the life settlement policy, then you will no longer have the policy and your family members may not have money for funeral or burial costs. The cash you receive is taxable, and the value of your policy might not be enough to afford you quality senior care. Therefore, this is only an option when Medicare, Accelerated Death Benefits, and Long-term care insurance cannot pay for your senior living care.
Planning for your senior living care early enough is a wise move. This ensures that you can pay affordable premiums as opposed to those who start later after retirement. In fact, after retirement, you might be denied access to many long-term care products. In addition, purchasing a policy early comes with a tax relief so it makes financial sense to plan well in advance.