The cost of long-term care can vary quite a bit depending on what kind of care you need, where you get the care, and where you live. The chart below shows a comparison of available financing options:
|
Financing Option |
Only Available for Long-Term Care Costs |
Remaining Funds Available to Heirs |
Rate of Asset Accumulation |
Eligibility Requirement |
Risk of Insufficient Funds |
Cost |
|
Family Support and Caregiving |
No |
No |
None |
No |
Moderate – Family members may be unable/unwilling to provide care |
You pay for services that family members are unwilling to provide |
|
Personal Savings |
No |
Yes |
Variable |
No |
High – Long-Term Care costs can exceed your personal savings |
You are responsible for creating private savings |
|
Long-Term Care Insurance |
Yes |
No |
Fixed |
Yes |
Moderate to Low – Long-Term Care costs could exceed original coverage amount |
Monthly premiums for the life of the policy |
|
Limited Long-Term Care Insurance |
Yes |
No |
Fixed |
Yes |
Moderate to Low – Long-Term Care costs could exceed original coverage amount |
Large one-time or short-term monthly premium |
|
Life Settlement |
Yes |
No |
Fixed |
Yes |
Moderate to Low – Amount received from benefit may not pay all long-term care costs |
None |
|
Viatical Settlement |
Yes |
No |
Fixed |
Yes |
Moderate to Low – Amount received from benefit may not pay all long-term care costs |
None |
|
Accelerated Death Benefit |
Yes |
No |
Fixed |
Yes |
Moderate to Low – Amount received from benefit may not pay all long-term care costs |
None |
|
Reverse Mortgages |
No |
Yes |
Variable |
Yes |
Moderate – Amount received from benefit may not pay all long-term care costs – Home maintenance costs still exist |
Processing and origination fees to establish mortgage |
|
Continuing Care Retirement Community |
Yes |
Yes |
Variable |
Yes |
Low – Additional care provided as needed in CCRC assisted living or nursing facility |
High purchase price and fixed monthly payment required of CCRC property |
|
Veterans Benefits |
No |
No |
None |
Yes |
Moderate to High – Amount received from benefit may not pay all long-term care costs |
None |
|
Medicare |
No |
No |
None |
Yes |
Moderate to High – Amount received from Medicare may not pay all long-term care costs |
Co-payments and deductibles |
|
Medicaid |
No |
No |
None |
Yes |
High – Amount received from Medicaid may not pay all long-term care costs – Recovery of Medicaid may be made against estate |
You pay for services not covered by Medicaid |
|
PACE |
Yes |
No |
None |
Yes |
Moderate to High – Amount received from benefit may not pay all long-term care costs |
You pay for services not covered by PACE |