There are approximately 28,900 assisted living communities in the US. These communities may offer multiple living options, including independent living, assisted living, and memory care. In addition to services like medication management, help with activities for daily living, and housekeeping, they also typically offer a broad range of social activities and events that keep residents active and engaged. But what if you need help getting funding for assisted living?
While assisted living provides a safe, comfortable environment for seniors, the cost can be a little scary. Prices vary between assisted living communities and from state to state. But with the average annual cost at just over $51,000, you may be wondering how you can help your loved one without it taking a significant toll on your budget.
Fortunately, assisted living may not be as cost-prohibitive as it looks initially. Here are a few funding options for assisted living that may help.
How to Pay for Assisted Living: 6 Options to Consider
You shouldn’t have to choose between what’s best for your loved one and your finances. If you’re concerned about the cost, know that you have options. Keep reading to see what works best for you.
1. Share the Cost
Consider organizing a family meeting to discuss your loved one’s potential move to an assisted living community. As part of that meeting, bring up the price and see if others might be willing to pitch in. Splitting the cost between multiple people can make paying the monthly rent easier to bear.
2. Convert Their Home Equity to Cash
If your loved one owns their home, you have a few options. The first is to help them sell it. They can then use the proceeds as funding for assisted living. If you want to sell the home quickly, you could also look into programs like EasyKnock’s MoveAbility or Sell & Stay. With these solutions, EasyKnock purchase the home. You won’t have to worry about listing the property, dealing with showings, or potentially having a sale fall through. Your loved one can even stay in the home as a renter until they’re ready to move, avoiding a lot of unnecessary stress.
If your loved one doesn’t want to sell their house, you can explore other options. One is a reverse mortgage, a solution available only to adults 62 years and older. Your loved one can convert part of the equity in their home into cash. While it’s called a mortgage, it’s technically a loan. As such, it will eventually need to be paid back. Alternatively, they could apply for a home equity loan.
3. Life Insurance
While most people take out life insurance policies to leave something for their beneficiaries, it’s also possible to use the money for funding for assisted living. They have a few options:
- Sell the policy and fund a long-term care plan.
- Set up a living benefit with their current policy.
- Surrender the policy for cash.
Selling a life insurance policy can be complicated, and the money your loved one receives may become taxable income. Speaking with your life insurance provider and a financial planner or tax expert can help ensure it’s the best move.
4. Long-Term Care Insurance
With long-term care insurance, older adults can get coverage for a range of services regular health insurance doesn’t cover, including assisted living. Your loved one will want to apply sooner rather than later, though. Waiting too long could result in the denial of an application or a more expensive policy.
Monthly premiums do tend to be more expensive than regular health insurance. However, most policies cover most (if not all) assisted living costs. You may find the monthly premiums worth that benefit.
5. Medicaid Benefits
While assistance varies by state, many offer Medicaid beneficiaries at least some financial assistance for assisted living. Those that do generally don’t cover basic room and board, though. Additionally, not all communities accept Medicaid. If you plan to go this route, check with your state’s Medicaid program (or your loved one’s, if they live in a different state) and the prospective assisted living community for further details.
6. Veteran’s Benefits
US veterans may be eligible for financial assistance for assisted living through the Department of Veterans Affairs. The Aid and Attendance benefit is a monthly, needs-based payment beyond your loved one’s VA pension that can help cover the cost of long-term care.
Tips for Choosing an Assisted Living Community
As you start looking around for potential assisted living communities for your loved one, you may quickly find yourself overwhelmed by options. Here are a few tips that can help make the decision easier:
Create a Budget
One of the best things you can do before you start looking is to make a budget for your loved one. Consider all of their income sources (including your contribution) and any debts they might have to see how much they may be able to afford. That can also help you figure out how much assistance they might need. This will also help when it comes time to find funding for assisted living.
Keep Them Close
If your loved one lives far away from you, ask them if they’d like to be closer. Being only a short distance away allows for more frequent visits, which can benefit you and your loved one both.
Online reviews can provide valuable insight, such as how the staff treats residents and the quality of the food. While bad reviews don’t always mean you should steer clear of a community, you might want to be wary if you notice any patterns.
Schedule tours with the communities you like and that fit the needs of your loved one. As you walk through, you’ll want to pay attention to several details:
- The appearance of the grounds and the housing
- How the staff interacts with residents
- The types of activities provided
- How the residents look
- The quality of the food
Don’t be afraid to ask questions, either. A good community will be willing to provide you with all of the details you need.
Talk It Over with Your Loved One
Most importantly, involve your loved one throughout the entire process. Let them be a part of everything. Ask for their opinions, feelings, and suggestions. Above all, respect their decisions.
Funding for Assisted Living: Research All of Your Options
The funding requirements for assisted living can be jarring at first, but seeing an uncomfortable number doesn’t mean that your loved one won’t be able to move into a community. Along with discussing the matter as a whole family, there are plenty of funding options available. A little research can go a long way in making assisted living much more affordable.
If your loved one has equity in their home, it may be worth looking into a sale-leaseback solution with EasyKnock. There are no strict qualifications like with lenders and your loved one can remain in their home as a renter until they are ready to enter into assisted living, or you can keep the home in the family and repurchase it later when you’re ready.
If a sale-leaseback sounds like the solution for you, contact EasyKnock today to get the process started.
If you’re looking for options to finance to be able to provide for assisted living, we have options for you. If you are still unsure on how to secure your finances after reading this article, consult a financial advisor to discuss your options when it comes to funding assisted living.