How to Pay for Long Term Care Through a Reverse Mortgage
As a senior American citizen, you have a number of options when it comes to long term care. By choosing to receive long-term care at home by a trained care giver or nurse, you can avoid moving to a nursing home. The benefits of this are obvious as seniors are more comfortable with their familiar home atmosphere settings. Using a reverse mortgage loan is one of the options you can use to pay for the costs involved in long-term care.
Long-term care insurance makes it a necessary condition that you are already in good health, so this option may not be available for everyone, especially for older applicants, for whom the premium involved may be prohibitive for taking up.
If you are a senior who has crossed the age of 62, and you possess/own your American home, you can take a reverse mortgage to help pay for home care, or for taking a long-term care policy that will otherwise be very unaffordable.
The reverse mortgage loan is basically a way through which you can borrow money from the investments you have already made on your American home. You can now free up the money or investment made in your home, which will otherwise only be available when you sell the property. You can continue to staying in the same house for as long as you wish for. Neither do you have to make any monthly payments to the lender.
The payments from a reverse mortgage can be cashed on monthly basis from the lender, in a one-off lump sum, or as an available credit line from which you can draw upon for your needs. Under American law, the funds you receive from taking out a reverse mortgage on your home are fully tax-free. No tax is charged by the Government on the money you get from your home, because it is your home.
A recent study made by National Council on Aging (NCOA) showed that the use of reverse mortgages to meet the costs of long-term care at ones own home has the potential in addressing a problem for many elder Americans.
In the year 2000, Americans spent $123 billion on long-term care costs for those age 65 and above, and this amount will double in the next 30 years. About half of those amounts were paid as out of pocket by seniors and 3 % are paid for using private insurance methods. Government health programs are used to pay for the rest.
Very informative from a payment plan point of view, i really appreciate it.
Speaking of long term care and how to finance it, I would add. Making the financial side calculations are critical to the decision process. BUT so is the back ground research on the types of policies and offerings from the various companies…without getting a ‘pitch’ or a ‘powerpoint’ tossed in before some objective review can take place.
I suggest any prospective buyer of long term care insurance find some independent sources of info. The top 30 most popular policies all may look alike but there are differences. The Senior Health Advocate just published an ebook, which anyone can get for free that outlines these Top 30 Most Popular Long Term Care Insurance Policies for the top ltci companies.