As you do your research on retirement communities, you will learn that there are not only different types of communities but also different financial arrangements and admittance agreements. Understanding the different types of contracts will be beneficial in helping you make informed decisions and prepare for the future. Contracts are classified into three types: Type A, Type B, and Type C. Communities will either only offer one type or provide alternatives for you to choose from.
Type A Contracts
Communities with Type A contracts, otherwise known as extensive agreements, offer to provide higher levels of care without increasing their monthly service fees. They are able to do so because you pay a one-time entry fee that effectively serves as a prepayment for future care. You may pay more initially, but your monthly expenses are fixed and will remain the same even if you require care, which can result in significant long-term savings. The entrance fees for Type A contracts vary based on location, size of residence, and the number of residents. Entrance fees in some communities are also partially refundable in which 50%, 75%, or 90% of your entrance fee gets refunded to you or your estate.
Type B Contracts
Communities offering Type B contracts, or modified agreements generally have more affordable entrance fees, with care services that can be provided when required. Although care expenses may be more affordable as compared to what you would spend outside of the community, your monthly fees will be increased.
However, Type B contracts can vary:
- You may be entitled to a limited number of free days in the health center, with extra care charges at daily market rates
- Care may be invoiced at a discounted rate
- Care may be invoiced at an equalized rate, for example, if you are an independent living resident and need to be transferred to a higher level of care, you will pay a different monthly service fee
Type C Contracts
Type C contracts are also referred to as Fee-for-Service contracts and require you to only pay for the care and services you require. Entrance fees and monthly fees are generally lower than that of other contract types, but if a higher level of care is required, full market rates must be paid. If you are an independent living resident who requires need short-term care, you must continue to pay your monthly fee as well as the cost of housing and care.
What to Do When Reviewing Contracts
Some things you can do include asking for copies of the contract in advance, giving you ample time to review and make notes. You should also ask all the questions you need in order to make decisions that are fully informed and in your best interests. Having a lawyer or financial advisor review contracts may also come in handy.
Embark on Residential Living with Discovery Village At Castle Hills
Interested to find out more about living at Discovery Village At Castle Hills? Contact our team and we can guide you and answer any questions you might have regarding our living options and financial contracts.