Options for Paying for Assisted Living
By Hook Law Center
A life insurance conversion allows policy holders to use their life insurance as income to pay for assisted living. This process can be complex, and is not available with every policy; however, for many life insurance purchases, it can serve as a tax-free loan.
People who own life insurance policies also have the option of selling their policy with a life settlement or a viatical settlement. Both types of settlements allow the policy holder to sell the policy for more than its surrender value, but less than the death benefit.
Reverse mortgages allow homeowners to use the equity on their home to receive cash, allowing seniors to receive money to pay for assisted living expenses and other expenses they may not be able to cover otherwise. With a reverse mortgage, the lender actually makes payments to the borrower, rather than the other way around.
Long-term care insurance is available, but can be expensive for older adults, with potentially limited benefits. Older adults who already require assisted living are unlikely to qualify for long-term care insurance. Because of the high cost and potential limitations, long-term care insurance is not right for everyone.
Government benefits are also available to older adults who cannot afford assisted living on their own. Veterans may qualify for the Aid and Attendance Benefit through the Veterans Administration. Thanks to Medicaid expansion, more older adults than ever also qualify for Medicaid, which can help pay for assisted living in some cases.