Reverse Mortgages and Long-Term Care Insurance
I recently read that two ways to pay for long term care are becoming front and center for many baby boomers, who are seeing or have already seen their parents struggle with long term care situations. The options of a reverse mortgage and long-term care insurance are both very popular ways to finance the expense of long term care.
Figures range from $100 to $400 per day for long term care, depending on what is being provided. Many Americans will use their policies for home health care, which is the least costly option usually, but is also the least intensive. Next comes assisted living, which is of course a more intensive plan of care and is for folks with more serious conditions.
A reverse mortgage is just what you’d expect it to be… rather than pay the bank, the bank pays you! Reverse mortgages are generally available to those 62 or older in the U.S. The money can be paid in a lump sum, but is usually paid in small monthly increments. Of course, as time goes on, the bank will have more and more of the equity in your home. For seniors, this may be okay. However, it does leave one less asset that folks can leave for their children.
With half of those over the age of 65 expected to need long term care in the future, the numbers are staggering. Many boomers don’t want to saddle their children with the worry and expense of caring for them as they age. Reverse mortgages may indeed be one effective way to accomplish paying the heavy toll of long term care.
In addition to reverse mortgages, you’ll probably want to consider a long-term care insurance policy. With this coverage, which costs a few thousand dollars a year, depending on your current age and health, you begin to make the investment necessary to protect your children in the future.