Posted on Feb 11, 2018
We understand that many people do not have unlimited funds to pay for senior care. Which is why we want to help you understand that you have several options available to help you pay for long-term home care and ease your family’s financial burden.
Life Insurance for Cash
Does your loved one have a life insurance policy? If so, do not throw it out! If you or your aging loved one has a life insurance policy, it might be possible for him or her to cash in the life insurance to provide a significant amount of money toward the cost senior care services. Some life insurance policies can be cashed in with the insurance company itself for 50 to 75 percent of the policy’s face value.
There are many people who need this long-term care and are overwhelmed by the daunting myth that they can’t afford to pay for it. Life insurance companies often profit from people never accessing their money that they’ve paid into it before the end of their life. It’s important that the public is educated on their rights. The money can be put into an irrevocable fund specifically designed for their care.
However, some policies permit these “accelerated benefits” or “living benefits,” as they’re called, only if the policyholder is terminally ill (typically meaning having less than six months to live, as certified by a doctor). Another form of cashing out a life insurance policy is called a “life settlement” (or “senior settlement”). This involves your loved one selling the policy to a life settlement company (different from the insurance company that issued the policy) for 50 to 75 percent of the policy’s face value; the amount depends on the policy benefit amounts, the policy’s monthly premiums, and the policy holders’ age and health.
The settlement company would then pay the life insurance premiums until your loved one passes away. The tradeoff in this circumstance, though, is that the life insurance policy’s own benefits are then paid to the settlement company rather than to you or other family members.
Long Term Care Insurance
Long-term care insurance helps cover the cost of senior care at home or in a nursing facility. This can help protect your loved one’s assets and can often cover much of the costs depending on their policy’s terms. Be sure to find out if your loved one has a policy, because most in home care providers work with long-term care insurance companies.
If you are researching information for a loved one, you should consider purchasing a Long Term Care Insurance policy. Granted they are not for everyone but for most people it is affordable and worth the cost. Unfortunately, no one can ever predict a critical change in our health situations. So, it pays to be proactive when it comes to planning your long term needs. There are certain conditions that deem people uninsurable for long term care insurance such as; Alzheimer’s disease, Parkinson’s and even uncontrolled diabetes. Therefore, waiting to purchase LTC insurance could be a significant mistake.
To give you an idea of the general policy feature of Long-Term Care insurance we will break it down for you.
First of all, you have the benefit amount so essentially the amount of money you receive from the policy- daily, weekly, or monthly maximum. Daily benefit policies tend to have the lowest premiums but also are the least flexible when it comes to covering at home care. The weekly and monthly home care policies allow you to have more flexibility when there are some days where little to no care is needed on certain days and more care is required on other days.
Then you have the elimination period, or waiting period, this is comparable to a deductible found in homeowners or auto insurance. The elimination period however when it comes to a LTC insurance policy is decided by the amount of days the client must pay for the covered services before they begin to receive benefits of the policy.
Then there is the benefit period, this is another factor that determines how long the insured receives benefits once the claim starts.
Viatical Life Settlements
If your loved one has a life insurance policy, there are companies that offer insurance owners the option to sell their policies in exchange for a lump sum payment that is greater than the cash surrender value (also known as the cash value of your insurance contract).
Are you are overwhelmed by the process of finding adequate and affordable senior care services for your loved one? Contact us today at Senior Helpers to see how your loved one might benefit from in-home care.
Senior Helpers – Sacramento/Placer provides compassionate caregivers to help our local seniors with day-to-day tasks such as housekeeping, meal prep/planning, and transportation as well as providing assistance with bathing, dressing, medication reminders and more. Our mission is to improve the life of seniors and help relieve the burden on their families. If your loved one lives in Sacramento or the surrounding areas (Roseville/Rocklin, Folsom, Rancho Cordova, Elk Grove) and you would like more information, please call us at 916-671-5777 or click the Contact Us link at the top of this page.