Covering The Cost of Long Term Care - Your Options

You have worked hard your whole life, and so it's only reasonable to expect that you will be taken care of in your golden years. Unfortunately, this is not always the case because there is a vast disparity between the cost of long term care and the financial payouts on offer via the government's social security scheme. 

Indeed, long term care tends to cost around $50,000 a year, while the average social security payout is around $17,000. Of course, this means that individuals are expected to fund this deficit themselves. Fortunately, there is a range of options that can cover this cost to explore. Keep reading to find out what they are, and to discover which will be the best choice for you and your circumstances.

Government assistance

First of all, to be granted any funding for long term care from medicare or Medicaid you have to use a provider that is certified by them. That is not the only provision either. Indeed, you also have to qualify for their financial support, and this means being below the federal poverty level. 

Then, even if you fall into this category, not everything will be covered. For example, both Medicare and Medicaid will cover essential nursing care. However, assisted living services aren't covered by Medicare, but can in some cases be covered by Medicaid.

While the assistance provided by the government is confusing and complicated to understand, the real problem is that most people will not meet the financial requirements to qualify. This means that they will have to find the money for their long term care, themselves. Keep reading to discover the options available for this.    

Life insurance 

If you have a life insurance policy, you may be able to cash in a portion that will be enough to cover the cost of your long term care. However, not all insurance policies offer this option, as it will depend on their specific terms and conditions. Choosing to cash in a portion of your life insurance, will also significantly affect the value of the payout you can expect to go to your loved ones. 

Long term care insurance

A long term care insurance policy is another financial product that can help you cover your costs. Indeed, they are specifically designed to pay for care in later life. To reap the rewards of this kind of policy you will first need to find one that is accepted in your location like this long term care insurance for providers in Wichita, as not all policies will be accepted in every state. The next step is to pay your premiums each year for as long as possible to make sure you have access to the greatest amount when the time comes. The good news is that long term care insurance is often excellent value for money, with it paying for itself within the first year of collecting the benefits. 

Selling your property 

Another option that you may wish to choose to cover the cost of long term care is to sell your home. Unfortunately, this can be one of the most emotionally challenging options, because we tend to want to stay or at least hold on to our long term homes where we have raised families and carved out a life. 

The good news is that there is a strategy that will allow you to sell your home and gain the funds you need for your long term care but also maintain access to your property. It is to sell your home to your children so it remains in the family, but cannot be accounted for in your financial assessment. 

Releasing equity in your home 

In a similar way to selling your property to your adult child, using a service that offers equity release can provide you with the cash you need to cover your long term care. Equity release works by providing you with a payment equal to a portion or all of the value of your home. On the agreement that the equity release company takes over ownership of your property while allowing you to remain living there. 

Although, it is worth noting that not everyone is happy to choose the equity release option. This is because some providers can offer significantly less than the market value of a property, so the original owners losses out. Some folks have even had trouble continuing to live in their home if they live past their initially agreed time. Therefore it's worth considering this option very carefully and doing your due diligence before making any decision.