How to Pay for Elder Care
- 1). Buy long term care insurance. These policies generally provide benefits for the entire continuum of elder care. Generally, you pay a monthly or annual premium for a specified maximum daily benefit, which you can set to equal the average cost of nursing home care in your area. Medicare does not cover long term care insurance except in very limited circumstances.
- 2). Purchase a hybrid life insurance/long term care policy. These are similar to conventional life insurance policies, except that in the event of a need for long term care, the company makes the death benefit available to pay for long term care insurance costs, tax free. Meanwhile, cash value within the policy grows at a specified rate of interest.
- 3). Use private savings. This may be appropriate if you have accumulated a large nest egg and cannot qualify for long term care insurance. A permanent life insurance policy may help you replace the money you have spent on long term or elder care.
- 4). Take out a reverse home mortgage. If you have equity in your home, you may be able to stay in the home while a reverse mortgage company sends you a regular income you can use to offset elder care or long term care insurance costs.
- 5). Apply for Medicaid. Generally, you must spend down most or all of your assets in order to qualify. Depending on the state, you may be able to exempt certain assets, such as home equity. The state will attempt to recoup whatever it spent on your behalf from your estate after your death, however.
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