When it’s time to relocate a loved one to an assisted living community, one of the first questions is “How will we pay for it?” There are many resources out there, but it takes research to find a program that your loved one qualifies for. We've listed some options here that may help you get a start on the research. At any point, feel free to give us a call at (865) 293-6563 for any questions you may have.

Bridge Loans

A bridge loan is a short-term/emergency option intended for families waiting to sell a house so they can move their parent into assisted living. One of the benefits of a bridge loan is that they are structured so that payments are made directly from the lender to the community. It is a viable option for loved ones entering assisted living if they’re selling a home or waiting for other benefits.

Reverse Mortgages

Reverse mortgages are for couples trying to finance care for one spouse while the other remains at home. Available to homeowners who are 62 or older, a reverse mortgage is a loan that coverts home equity into cash. The loan does not have to be paid back until the last borrower passes away or moves from the home for one year. The loan is not normally paid back in increments, but when the home is sold, the lender is paid back the full loan amount plus interest.

HELOC or Home Equity Line of Credit

Some individuals choose to accept loans from family or friends for their care when using home equity for a line of credit. HELOC, or Home Equity Lines of Credit, are private reverse mortgages or retirement mortgages where the home is used as security to the lender. This is often done with selling a home, when the financially secure adult children are set to inherit the home.

Medicaid

Medicaid is intended to pay for health and long-term care for persons with limited financial resources. Although Medicaid will only cover about 10 percent of assisted living services, it should still be on your list to pay a portion of the assisted living fees. Do note that is it financially based assistance. Medicaid rules do not allow your loves ones to give away money to other family members in order to qualify for Medicaid. Medicaid now conducts a five-year "look-back" period - they will examine all financial dealings for at least the past five years. If money was transferred or gifted during those five years, there will be a penalty/delay in Medicaid eligibility. Many state programs offer assistance with assisted living costs for those who have no financial resources. Qualifying for such assistance usually means you have less than $2,000 in assets, although exact program requirements can vary from state-to-state.

Long-Term Care Insurance (LTCI)

Long-term care insurance can cover the cost of long-term care in certain types of care facilities, depending upon the policy. Policies may cover stay in assisted living, licensed nursing facilities and home health care.  Premiums for long-term care insurance are based on the age of the individual, the benefit amount, the time period, elimination or deductibles, and special options (i.e. inflation adjustment, non-forfeiture benefits and spousal discounts). There are different types of LTCI – and tax implications with certain policies. Here’s an article from AARP - Understanding Long-Term Care Insurance - with good information for consideration.

Supplemental Security Income (SSI)

SSI is a monthly cash payment from the government. It is for individuals in financial need, aged 65 or older, or have a disability. To qualify for SSI, a person must have little to no income, less than a few thousand dollars in assets and have U.S. citizenship or qualified alien status. Learn more about SSI here.

Life Settlements 

If funds are needed that can be utilized in many ways, a life settlement may be of interest. It is the sale of an existing life insurance policy to a third party. The sale will be for more than the cash surrender value, but less than the death benefit. Proceeds from a life settlement can be used for any purpose, including financing senior living and healthcare needs.

Senior Living Line of Credit

Responding to the growing senior population, Senior Living Lines of Credit are tailored for families who want to move to senior living. It's helpful if you need time to sell a home, assets, or are waiting for federal benefits. Typically structured as a signature or personal line of credit of up to $50,000, it allows families to borrow what is needed on a monthly basis to help finance their loved one's needs. Like any loan, a Senior Living Line of Credit is subject to credit approval.

Veterans Benefits

The Veteran’s Aid & Attendance Pension, is a program that can provide financial help to those who require assistance with activities of daily living such as eating, bathing, dressing, undressing or taking care of the needs of nature. To qualify financially, an applicant must have on average less than $80,000 in assets, excluding their home and vehicles. It can pay up to $1,632/month for veterans or $1,055/month for surviving spouses. One of the benefits of Veteran’s Aid and Attendance Pension is that it allows you to keep more assets than state programs and provides a higher level of assistance. Unfortunately, seniors cannot receive benefits from both the Veterans program and state programs. This is the time to do your research to see which set up is most beneficial. Learn more regarding benefits, limits and spousal coverage at the Veteran’s Aid & Attendance Program.

Finding the right senior resources can help ease the stress of caregiving. We've put together a list of additional resources to help guide you through next steps. If you're interested in learning more about one of our communities, contact us here.