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Financial Help

Ways To Help Your Family Finance Senior Care

Veterans’ Aid and Attendance
Did you know that the Veterans’ Administration will pay a monthly benefit to any active-duty veteran or their spouse who needs care? Any vet who has served even one day during a period of foreign war can apply for this Aid and Attendance Special Pension; beneficiaries need not have served overseas, retired from the military, or seen combat. Surprisingly, however, only a few of those eligible take advantage.

Under recent increases to the new benefit plan, a married veteran can receive over two thousand dollars a month to pay for senior  care, while a veteran’s surviving spouse can receive just over a thousand. Funds can be used to pay for  nursing-home care. 

There is also an asset maximum, the amount of which varies with life expectancy. This is not a new benefit; in fact, it’s 60 years old. Given the number of veterans and their survivors in the US population, the National Care Planning Council estimates that up to 25% of seniors could potentially apply for Aid and Attendance. 

Even veterans who have heard of the pension may not realize they can receive benefits even if they are healthy yet their spouse is sick—up to $1337 a month, in fact.

Who Is Eligible For V.A. Benefits?
Any Veteran with 90 days consecutive active duty services.
Any Veteran who served at least one day during active war time.
The Veteran did not have to serve overseas or in combat.
The surviving spouse of a veteran if married to the Veteran at time of the Veteran’s death.
How to Apply for VA Benefits: 
Go to www.va.gov and use the Veterans On-line Application (VONAPP).
Contact your VA Regional office.   To locate the closest regional office to you visit the VA website.
No Computer? No problem, Call the VA
1-800-827-1000.

Other Little-Known Sources of Help
Even if you’re not a veteran, programs both public and private offer benefits to seniors feeling the financial squeeze. From sources of information about long-term care to foreclosure prevention assistance to subsidies for food, medication and housing, the National Council on Aging has identified more than 2000 different programs assisting elders in making ends meet

One example, the Alzheimer’s Association offers a $1000 grant to defray the cost of respite care. The money can be used to give families a break from daily caregiving responsibilities so they can provide better in-home care for loved ones suffering from Alzheimer’s.

To learn more, visit the National Council on Aging’s free benefitscheckup.org. Simply answer a series of online survey questions to identify benefits that could help cover or lessen the costs of elder care. The site creates a report detailing which programs could be beneficial in your situation and tells how to apply for them. Since the site’s founding in 2001, it has identified more than $10 billion in benefits for more than 3 million older adults.

Using Life Insurance to Fund Long-Term Care
Many seniors have funds invested in a life insurance policy but need ready cash once there’s a change in health status or living situation. There are a number of options for using life insurance as a source of funds, including cash surrender, death benefit loans, accelerated death benefits, and life or viatical settlements. Choosing a method of accessing these funds requires careful consideration of a senior’s life circumstances as well as the tax consequences.

Whole life and universal life policies build a reserve of cash through interest-earning excess premiums. This is called the policy’s cash value (as opposed to its face value, or the death benefits it offers). Policy holders can access this accumulated cash value using withdrawals, loans from the policy, or a cash surrender of the policy. In a cash surrender, be wary of surrender fees, depending on how long you’ve owned the policy, and note that the gain on the policy is subject to income tax. A cash surrender gives up the policy’s death benefit, and depending on the policy-holder’s age and physical condition, it may be difficult or expensive to replace this coverage later.

Death benefit loans borrow from a life insurance policy’s cash value. These loans have low interest rates and no repayment schedule, but if they aren’t repaid with accrued interest after the policy-holder’s death, the death benefit will be reduced by the amount of the outstanding loan. Death benefit loans come in a lump sum that can be used for any purpose.

A new option called accelerated death benefits allows a policyholder to receive a portion of her policy’s death benefits before their death. The policy beneficiaries still receive a death benefit, just reduced by the amount of the ADB. Policyholders receiving ADB must still make their premium payments, unlike in a life settlement, and unlike a death benefit loan, accelerated death benefits do not need to be repaid. This option is reserved for the terminally ill.

In a life or viatical settlement, a policyholder sells her life insurance to a third party for a lump sum, usually more than its cash surrender value but less than its face value. This third party (the life settlement company) continues to pay the premium until the policyholder dies, at which point they collect the death benefits. Proceeds from a life settlement can be used for any purpose, from financing assisted living to remodeling a home to make it senior-friendly. (Life and viatical settlements are quite similar, except that viatical settlements are typically designed for those with a life expectancy of five years or less.)

When to use which option? A cash surrender is typically best for policies with a substantial cash value, while life settlements make most sense for policies with little or no cash value.

Bridge Loans
Traditionally, most Americans’ most valuable asset has been their home. But with houses lingering on the market for months or even years, that capital may not be available when the time comes to make the move to a higher level of care. How to unlock the cash that’s been so carefully invested over the years?

In the short term at least, an Elderlife Line of Credit is one answer. 

Elderlife Financial offers a unique line of credit designed to provide temporary financial assistance for assisted living or skilled nursing. With its rapid turnaround time, this loan can be especially useful when dealing with urgent needs that must be met before other long-term financial resources can be tapped. Say the family home isn’t selling, but a senior needs to pay assisted living move-in costs right away; an Elderlife bridge loan can make that move possible while the house is still on the market.

Reverse Mortgage
Reverse mortgages let homeowners stay in their own home while also tapping into the equity they’ve built up over the years. Mortgage holders get tax-free cash flow as a loan against that equity—a loan that doesn’t need to be repaid until the house is sold or the owner moves out or dies.

There are some significant advantages to this type of loan:

  • - They place no restrictions on how the money can be used.
  • - Homeowners can never owe more than their home’s value at the time of sale, meaning that if the home’s value goes down, heirs won’t be stuck with the bill.
  • - Reverse mortgages do not affect Medicare or Social Security benefits.
  • - There are no credit score or income requirements.