Hidden in your life insurance policy is a tremendous value that could help pay for senior living and offer you flexibility and peace of mind. Life settlements are a smart funding option with several key benefits.
Affording senior living—why it’s so important to know all your funding options
An estimated 70% of those over the age of 65 will need some form of long-term care in their lifetime, yet many do not believe they will need that care, or they greatly underestimate its cost. And yet, one of the most common fears people have about retirement is that they will run out of money. That’s why it’s wise to have a realistic view of just what the numbers are, as well as an understanding they are most likely to continue to increase over time.
The 2024 Genworth Cost of Care survey reported these monthly figures:
- Median cost of assisted living: $5,350
- National average for skilled nursing: $8,669 for a semiprivate room and $10,646 for a private room
- Average cost for a home health aide: $5,900 (40 hours a week)
In addition, the National Council on Aging says that the average monthly cost of memory care is $6,395.
While these figures can be shocking, there is also some very good news: multiple funding options can make affording senior living much easier. And of these options, life settlements can be an excellent choice.
How life settlements can be a major asset for paying for senior living
First, a definition of life settlements.
A life settlement is the result of selling an existing insurance policy to a third party for a one-time cash payment. The payment will exceed the surrender value but be less than the actual death benefit. Once the sale is concluded, the purchaser becomes the policy’s beneficiary and assumes payment of the premiums. The purchaser thus receives the death benefit following the death of the insured person.
With a life settlement, your payout will most likely be higher than what the market would pay if you let your policy lapse or it was cancelled.
Related: How Life Insurance Conversion Can Help Pay for CCRC Senior Living
How life settlements can make it easier for you to make the move to a continuing care retirement community (CCRC)
A big benefit of life settlements is that they give you the option of receiving a lump sum. You can use this lump sum as you choose—paying for senior living in a continuing care retirement community (CCRC) is a good choice.
A continuing care retirement community does come with a large entrance fee, but when you consider all that comes with it, you see how much value there is. Most CCRCs operate on a rental basis and also charge an initial entry fee, which covers regular expenses as well as long-term care costs.
Having the payout from a life settlement can help provide the funds you need for the admission fee to pay the continuing care retirement cost, as well as help with monthly service fees. At St. Mark Village, you will pay a one-time Admission fee when you enter through Independent Living, and benefit from our Life Care Promise: you will receive the care you need for as long as you need it, even if your financial situation changes.
Related: The Care CCRCs Offer Seniors, From Assisted Living & Memory Care to Skilled Nursing
And there’s all the other benefits of life in a continuing care retirement community.
- Protection from rising health care costs. Your entry fee is a “down payment” for your future care needs. Think of it as a plan for the future. Plus, your buy-in is considered a prepaid medical expense by the IRS, so tax deductions may be available.
- Control of your future. Choosing a CCRC means you won’t be leaving tough decisions to family. Instead, you decide where you want to be and how much involvement you want your family to have.
- An enriching lifestyle centered on healthy aging. The world is your oyster in a CCRC such as St. Mark Village. New friendships, new opportunities for learning, exploring, and savoring every day. Outstanding amenities, superb dining, exceptional wellness programs…the list goes on. All in an environment designed for your health, safety, and enjoyment.
Learn More About Using Life Settlements for a CCRC
When you are exploring your options for funding senior living, keep life settlements in mind. If you’d like to learn about other funding options, we encourage you to download our free Financial Planning for Retirement Living Guide, which offers everything you need to know about the cost of senior living.
And when you are considering the type of lifestyle you want, don’t get stuck on the continuing care retirement community cost—find out just what a great value CCRC living can offer you—and how much peace of mind you can enjoy at St. Mark Village! Schedule a time to speak with an advisor today!
