The average rent for a one-bedroom apartment at an assisted living community per month is about $3,823; in some regions the cost is higher. So, understandably, many families who contact us are concerned about how to pay for assisted living
That’s where we come in. Our Senior Living Advisors have had the honor and pleasure of educating thousands of families about ways to pay for care that they may not have discovered otherwise. Learn more about 10 of the most common ways to fund assisted living.
Ways to Pay for Assisted Living
It is important to remember that when it comes to assisted living, the payment method that’s best for your family will depend on your unique circumstances and sources. Here are 10 common ways to pay for assisted living:
1. Income and Savings
Using personal income or savings to pay for assisted living is the simplest route. But in this trying economic climate, $3,823 or more is beyond what many seniors can afford.
2. Long-Term Care Insurance
If your loved one has long-term care insurance, in most cases it covers assisted living, although it depends on specifics of the policy. Unfortunately, according to the Long-Term Care Association, less than 3% of Americans have long-term care insurance. If your family is not already covered, becoming covered would be prohibitively expensive. Generally, long-term care insurance is only affordable when purchased during one’s middle-age or younger years. But if your loved one is covered, it could be a godsend.
3. Veteran’s Benefits
The Department of Veterans Affairs (VA) has assistance programs that can help to pay for care for older veterans who served during wartime (but not necessarily actual combat). Assistance is also available to spouses of wartime veterans. Additionally, there are assisted living communities focused on caring specifically for senior veterans and their families.
4. Home Equity
While not always the preferred option, many seniors sell their home to pay for their care. For those who need assisted living immediately, but aren’t able to sell their home right away, some communities can offer rent deferments that are paid back when the house sells.
5. Selling a Life Insurance Policy
This practice, known as life settlement, involves selling your policy to another person or a company, who pays the premiums from then on, but collect the benefit when you die. It’s understandable that people would be reluctant to pursue a life settlement, particularly if it negatively affects the financial future of their heirs, but it’s still good to be aware of this strategy.
6. Pooling Family Support
A senior who cannot afford assisted living often relies on some financial support from children or other family members.
7. Using a Reverse Mortgage
A reverse mortgage allows you to borrow money based on equity in your home, which is paid back when you sell the home or move out. You’d think a reverse mortgage wouldn’t be helpful for a senior who is moving to assisted living because the reverse mortgage stipulates you must reside in your house, but in some cases it can useful. Imagine a senior couple who own their home outright. The husband is healthy, but the wife has advanced Alzheimer’s disease. The husband is looking for professional care for his wife. They could use a reverse mortgage to pay for the wife’s care at an assisted living community with memory care, while the husband could remain at home.
8. Renting the Home
If pooling your family’s support and resources or having a reverse mortgage is not possible, considering renting out your loved one’s home. Renting allows for your family to maintain ownership of the home, which may be difficult for your loved one to let go of, while creating income for the family to use to pay for assisted living.
9. Considering Location
Similar to renting and searching for housing, another way to save on senior living costs is to consider the location of your preferred assisted living community. Costs vary by location and you may find that you can significantly save more money in one location than another.
In some states, Medicaid covers care at assisted living communities. But Medicaid, which is not to be confused with Medicare, is only available to seniors who have little or no assets, so it’s generally an option of last resort.
Do you have questions about how to pay for assisted living? Our Senior Living Advisors can answer them, and their help is always free. You can see typical assisted living costs here, and view other resources for caregivers.