As you or your parents get closer to retirement nothing is more important than Senior Care Planning. Many costs you will find are not covered by medicare such as long term senior care. This article on Senior care helps uncover some of the hidden costs that come along with being elderly.
As the number of baby boomers heading towards retirement begins to increase subsequently so will the need for long-term care. Long-term care provides services that act as an essential support system for many senior citizens who require assistance with daily living activities. While long-term care is most definitely a benefit to families who need assistance caring for the elderly, it can also pose as a severe financial burden as it is generally not covered by Medicare.
Long-term care includes of both medical and non medical services. Majority of long-term care involves assisting senior citizen with daily living activities. These daily living activities can include anything from using the restroom to shopping for groceries. The care provided in daily activities such as these are considered non skilled or “custodial” care and are not paid for by Medicare. According to a study conducted by Genworth Financial in 2006, long-term care costs over $70,000 a year on average. The similar study conducted by Genworth in 2007 showed little difference in pricing for a single bedroom in a nursing home. The average annual cost for a private room in a nursing home was $74,806. With the current cost of living accumulating as it is, the expenses of long-term care for elderly family members often places a financial burden on loved ones. Majority of individuals do not possess the means for funding this care and have limited options to explore, forcing them to take out loans and obtain debt in order to take care of the family member needing the long-term care.
A solution to this problem has emerged in recent years in the form of the life settlement market. For those unfamiliar with life settlements , a life settlement is the sale of an existing life insurance policy to a third party for an amount exceeding the cash surrender value offered by the life insurance company. Once this transaction is complete, the individual is able to spend the cash received any way they see fit. The institutional investor that purchased the policy will continue to pay the premiums until the death of the insured, at which time they will receive the death benefit from the policy. There are only two other options for disposing of a life insurance policy. The individual can either stop paying the premiums and let the policy lapse, in this case they would receive nothing; or, the individual can sell the policy back to the insurance company for the cash surrender value. Offers provided in life settlements typically exceed the cash surrender value by three to four times the monetary amount.
For those who require long-term care, but cannot afford the increasing expenses that entail, a life settlement is the perfect solution. An individual is able to sell his or her existing policy and use the money received through the life settlement transaction to purchase long-term care insurance. If the individual does not qualify for long-term care insurance, he or she is able to use the cash received to pay for their long-term care needs. A life settlement can lift the financial burden off the shoulders of a policyholder and their family.
There are numerous reasons an individual would consider the life settlement option. Maybe your insurance needs have changed, the premiums have simply become too costly, or maybe you have come across some unexpected expenses. Whatever the reason, a life settlement may serve as the best possible option for individuals considering selling a life insurance policy.
To learn more about the life settlement option visit
www.milestonesettlements.com.
By Preparing well now you can prevent becoming a burden to yourself and your children when you reach your old age.
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