The cost of senior living can be prohibitive for many, with monthly rates going for over $5000. Before moving your loved one to a retirement community, you should explore payment options. The following questions will help you learn how to use a life insurance policy to pay for assisted senior care in Arlington, TX.
Can You Use Your Life Insurance Policy to Pay for Senior Living?
A life settlement allows you to sell a life insurance policy you cannot afford or no longer need. You can sell the policy to an investor for cash. The investor will pay the premiums, becoming the beneficiary when you die.
Will You Receive Cash from The Life Settlement Upfront?
When you sell the insurance policy, you will receive the cash in a lump sum. You can pay for senior living or any other expenses. Depending on the terms of your policy, you can receive a substantial amount.
Will You Need to Pay Taxes on The Money You Receive?
The life settlement is tax-free, and you do not have to worry about extra charges that can reduce the cash you receive. You can pay for senior living, and your family will not have to worry about additional financial responsibilities.
Who Will Assume Financial Responsibility If You Die Unexpectedly?
If you die unexpectedly or sooner than expected, the investor, and not your family, will assume financial responsibility. By buying a life insurance policy, the investor assumes the benefits and any associated risks.
What Are the Drawbacks of Life Settlements?
The main drawback of selling your life insurance policy is that you no longer have coverage. The policy moves to the third party, and you cannot leave death benefits to your loved ones. The life settlement may also be less than the policy’s face value.
How Much Money Can You Expect to Get from Life Settlement?
The lump sum of cash you get from the life settlement will depend on the number of policies you have made and how much the policy is worth. You can contact your insurance provider to determine the value of your policy.
Do all Investors Offer Similar Terms?
Different investors make various offers, which can differ widely. If you are thinking about a life settlement, shop around and compare offers to get the best deal. A good life settlement broker will ensure you get the best deal available.
Is a Life Settlement the Best Option for You?
Before deciding to sell your life insurance policy, talk to your financial advisor. Find out if a life settlement is the best way to pay for senior living. You should make the best decision for yourself and your family.
What Happens If You Need Medicaid in The Future?
If you cash out your life insurance policy, it can affect your eligibility to apply for Medicaid in the future. Be careful how you use the money to avoid passing the asset limit. Paying for senior care can leave you without much to pay for other expenses.
Can You Get a Long-Term Care Benefit Plan?
If you have a life insurance policy, you can transform it into a pre-funded account that will disburse monthly benefits to pay for senior care. With the long-term benefit plan, you qualify for Medicaid.
Your life expectancy is likely to determine the offer you receive. Ensure you understand the terms and conditions before signing any documents or contracts.