Wondering How to Finance Senior Living?


Senior living has transformed a lot in the past decade, giving aging Americans a wider array of living options. However, with the expansion of options comes increased financial complexity. Finding a solution that provides both the services and comfort you need, all for the right price, can be quite challenging. The search for a new home can end up being stressful, tiring, and emotionally exhausting for everyone.

At The Heritage, we understand how daunting the situation can be for families and their loved ones. Finding a good living situation is no light matter. Just the move can be a ton of work; you don’t want to end up moving again within a few months or a year. In today’s blog, we want to discuss the financing of senior living. Getting good quality care isn’t cheap, and many people find that life’s ups and downs put them at a disadvantage when it comes to paying for great care. The good news is, you have more options than you think you do. Read on for answers to common questions that families have about financing senior living.

Common Questions About Affording Senior Living

Can we pay for senior living with life insurance? 

Many people find themselves casting about for any financial option available. When health is declining and the current living situation just doesn’t work anymore, you don’t always have the luxury of time. People turn to life insurance policies, and sometimes this can actually be a great option. You have to use the “life settlement.” Here are some of the pros and cons of this path.

Advantages of using life insurance:

  • There are no restrictions on how you use the funds
  • You get a lump sum issued that can go toward in-home care, home improvements, or senior/assisted living
  • If you use the funds to pay for long-term care, there may be helpful tax deduction
  • You won’t have to make premium payments anymore
  • Life settlements can pay up to seven times more than their cash surrender value

As you can see, there are several reasons why a life insurance policy can be a great solution for many different people. That being said, just like any other solution, there are some drawbacks to consider.

Drawbacks of using life insurance:

  • Sometimes, the settlements become taxable as capital gain
  • Using a life insurance policy can disqualify you for Medicaid
  • The new owner of the policy is the one who ends up with the debt benefit
  • The one receiving the benefit may have to have a medical exam
  • You may end up paying a broker fee of up to six percent of the policy’s value unless you sell it on your own

How much does senior living actually cost? 

It’s a good idea to know what you’re facing when it comes to paying for assisted living. The average fees are around $3600, though they can be higher or lower depending on where you are. If the number is intimidating, we have some good news: support and services can usually be customized. Many assisted living centers offer a la carte systems that allow you to pick and choose the services you need. Not paying for services you don’t need will save you a lot of money.

If you are finding that your current location has high prices, you may want to consider a different location. This can be greatly to your advantage if you can move closer to family and get better living costs. There are many different ways to handle the situation so that it will work for you.

Turn to The Heritage

Senior living’s complexities, advantages, and disadvantages are navigated by families and their loved ones every day. No matter what your financial position may be, there are people working hard to provide you with options.  The staff at The Heritage is among them. We have a deep understanding of how daunting finding a good living situation can be as you get older, and that is why we do what we do. We are on a mission to be New Jersey’s solution to assisted living, and we accomplish this by creating a great community with world-class services that allow seniors to live life to the fullest. Contact us to learn more today!