Senior living facilities provide independence and peace of mind while empowering you to live comfortably with access to help when needed. However, the cost of these facilities is increasing rapidly. With this increase comes more pressing concerns for older adults and their families as they navigate funding.
Whether you plan to use private financing, long-term care insurance, or funds from selling your life insurance policy, it is necessary to understand the factors contributing to this increase and how they may impact your situation. This knowledge will help you navigate the various options for funding your next chapter in life.
Despite the 3.2% cost of living adjustment that Social Security will provide in 2024, inflation rates are still making it challenging to keep up with costs.
The base cost of assisted living can range between $3,500 and $10,500 a month. Assisted and independent living costs consist of three primary components — moving-in, monthly rent, and additional care services. These services can include help with eating, bathing, and administering prescription medicine. Memory and skilled care facilities will incur additional fees as these offer 24/7 support, assistance, and access to licensed health care professionals.
In 2024, the projected median cost of assisted living is $4,917 per month, and due to inflation, the prices continue to rise. While most older adults fund their living facilities with a combination of assets, insurance benefits, and personal savings, the need for assistance from family members is increasing. Additional implications of the rise in retirement home costs include:
Personal funds like retirement plans and Social Security may only cover some expenses assisted living facilities demand. There are a few other funding options to explore, each with its own eligibility criteria and implications. As neither Medicaid nor health insurance covers assisted living, you may need to explore these other options:
You can sell your life insurance policy to fund your assisted living accommodations and add-ons to make your life more comfortable. When you do this through a Life Settlement, the buyer pays you a lump sum to become the new owner of your policy, taking over the monthly premium payments and becoming the beneficiary.
Consult with your financial advisor before taking this step, as they can help you determine any taxes applicable to your sale. They can also help you map out a good strategy to optimize how you allocate the lump sum toward your cost of living and explore additional funding options if you need it.
A Life Settlement turns your life insurance policy into a present resource if you are 65 years or older, your policy is two years or older, and your death benefit is $100,000 or more. The sales process is typically as follows:
If you have a terminal diagnosis and a life expectancy of less than two years, you can opt to sell your life insurance policy through a Viatical Settlement. The sales process is similar to a Life Settlement, with the same terms and conditions regarding change of beneficiary.
The rising cost of senior living facilities puts significant pressure on older adults and their families. The strain on finances is becoming more pronounced, and finding quality care and accommodation is more accessible with knowledge of financing options available. Through private financing, reverse mortgages, and selling your life insurance policy, you can access the care you need without compromising your or your loved ones’ financial stability.
Settlement Benefits Association has helped older adults and people with terminal diagnoses sell their life insurance policies with the best possible outcome. We are an active member of the Life Insurance Settlement Association. Our knowledgeable team is here to represent you and your interests as you navigate selling your life insurance policy. Contact us today for more information, or use our Visual Valuator to find out how much your policy is worth.
