It’s not a pleasant scenario: your health has deteriorated to the point where your spouse can no longer take care of you on their own, and you need to consider long-term care. Or you had a fall that broke your hip, and surgery is out of the question. Or your memory is failing. Our bodies don’t heal as quickly as we age. Our very cellular structure is altered, and we cannot function as independently as we would like. And for some of us, long-term care is the only option. When that happens, we need to make some tough choices.
The good news is that the days of nursing home care being our only option are long gone. There are so many different aspects of long-term care: community-based services, assisted-living facilities, at-home care, skilled nursing, and many others. You now have many more choices when it comes to meeting long-term care needs, especially when it comes to planning for them and paying for them.
Tips for Planning and Paying for Long-Term Care:
Planning – Anticipating the Need
There are two things to consider when planning for long-term care needs: you and your spouse’s current health and any financial instruments that can help cover your long-term care costs. According to pharmacist Madeline R. Vann writing for EverydayHealth.com, there are 15 common health concerns for senior citizens, ranging from arthritis and diabetes to cancer, falls, and osteoporosis. If you currently suffer from any one of those, you might eventually consider long-term care as your condition progresses. Even if you’re currently in great health, all it takes is one fall or the sudden onset of one of those medical conditions for you to need long-term care. Once you determine that you might need it, you should consider long-term care insurance, which is a policy that will provide benefits when you need them. In addition, you should also know the value of your home in case you need to sell it to pay for the care.
Paying – Funding the Need
The fact is that long-term care is expensive. According to Genworth.com, the median monthly cost of a semi-private room in a nursing home is $7,148 per month, while the monthly median cost of a home health aide is $4,099. When you need cash to cover long-term care expenses, consider a reverse mortgage, a type of loan where your home’s equity is paid out to you monthly, and the whole loan is repaid after you die or move out of the property. There are pros and cons to reverse mortgages, however. The upsides include that you can receive a lump sum that can be used for any of your expenses and you don’t need outstanding credit to qualify for one. However, the downside is that there might be high upfront costs and interest rates, and it might place a burden on your heirs if you leave the property to them in your will and it still has the reverse mortgage attached. So, think carefully about whether or not to proceed.
Another way to consider paying for long-term care is cashing out your life insurance policy. If it is a whole-life policy, you can surrender it for its cash value, or you can get a life settlement, which is the sale of a policy to an investor. Both options allow you to free up funds for living expenses.
When you plan carefully for any long-term care needs, you can keep the costs manageable while you focus on ensuring that you or your loved one gets needed care. It’s also good to know that you have options when it comes to paying for it when the need arises.