Now that we have arrived at the long awaited generational stage in our society that “Baby Boomers” are reaching the age of Medicare eligibility, the need to address the question of who is going to pay for a massive increase in long term care spending has become paramount.  Exacerbating the growing crisis is the impact of the economy on the availability of private pay dollars and government spending.  For the last two years we have watched as one of the primary sources of private funds, equity in the homes of seniors has evaporated.  Simultaneously, state and federal budgets feeling the pinch of an eroding tax base and out of control spending on health care have started cutting back on Medicare and Medicaid spending. 

We are at a crisis point in our nation’s history.  The cost of long term care continues to rise every year, and seniors (and their families) confronting the realities of what it costs to provide home based care, assisted living, or long term nursing home care are looking for solutions.

For those families with a long term care insurance policy, a portion of these costs may be covered if they meet the necessary eligibility requirements.  And for those families with the last name Gates or Winfrey, they can just cut a check.  But what about the vast and often overlooked middle market?  Where do they find the resources to cover all or a portion of these costs?

For the ANSWER-- Click Here to read the complete article by Chris Orestis published by Insurance News Net Magazine

National Underwriter (published June 14, 2010)

by Chris Orestis, President Life Care Funding Group

The question was: My client would like to use a life settlement to help pay the assisted living expenses for her mother, who is alert but frail and needs the care the community provides. The mother is the owner and insured of a $250,000 UL in-force policy, but the daughter (my client) has power of attorney for her mother’s financial affairs. Is a life settlement the best option in this situation and how do you recommend I proceed?

The answer is: Monetizing life insurance policies to help cover the costs of long term care in its various forms has grown much more common in the last couple of years.

Providers of assisted living, skilled nursing home care and home healthcare have come to realize the financial opportunity for policy owners in need of their services but lacking in funds. States are now waking up to see that the use of a life insurance policy to access money is a better route for seniors than letting a policy lapse or be surrendered. Maine, Oregon and Washington are three examples of states that have passed laws requiring insurers to notify policy holders of their legal right to a life settlement at the point that a policy would lapse or be surrendered. As time marches on, more states are considering and will enter this law onto their books. 

Simultaneously, more seniors and their families are becoming aware that a life insurance policy can be cashed in through a variety of mechanisms to raise money to help cover the very expensive costs of long term care.

In this particular example, the family’s representative will need to be aware of a few factors. First, when going down the path of monetizing a life insurance policy, it is critical that the family members are in agreement and are active participants in the process. Working with the daughter as POA will help move the process along and not burden the mother. Unfortunately, a policy of this size will not find many interested life settlement companies as most have minimum face size requirements in the range of $500,000-$1,000,000. Also, the companies that specialize in underwriting for life expectancy evaluations do not have the ability yet to accurately account for the sudden dynamic of “Life Expectancy Compression” that occurs in a long term care scenario.

You will need to look for a company that specializes in working with the long term care space and understands how to underwrite this specific population. Also, keep in mind that a life settlement is one possible option, but it is not the only option to monetize a life insurance policy to raise money for long term care.

www.aplaceformom.com to feature Life Care Funding Group’s Funding Solutions for Senior Living 

Life Care Funding Group and A Place for Mom announced the addition of Funding Solutions for Senior Living to the “Financial Assistance” section of the #1 website in the world for Senior Living resources and referrals.  Life Care Funding Group is the leading provider of funding solutions to the senior living industry and works with over 2,500 providers around the U.S.  A Place for Mom is the leading online resource in the senior living industry for families looking for information and access to providers of senior housing and long term care. 

A Place for Mom’s “Financial Assistance” program provides information to families about their funding options to help pay for the costs of senior housing and long term care.  Life Care Funding Group has been selected as the preferred provider of Life Settlement funding and will provide information and assist families to access the maximum amount of liquidity they can derive from an existing life insurance policy. 

“Many families we help are struggling to afford the costs of Senior Living,” said Brian Trisler, co-founder and Senior Vice President of A Place for Mom, “and our goal through the Financial Assistance program on our website is to provide them with information and access to the leading provider of the most appropriate financial tools to meet their needs.” 

Since the onset of the deepest recession to hit the U.S. in almost a century, seniors and their families have been struggling to afford the costs of senior housing and long term care.  Families have been looking for alternative funding tools to help them in a time of crisis and the senior living industry has responded by making resources such as converting a life insurance policy into a long term care benefit to pay for these costs readily available.  Adding Life Care Funding Group’s Funding Solutions for Senior Living program to A Place for Mom’s website is another move towards making these financial tools readily available to the people who need them most. 

“We work with families everyday that own a life insurance policy and they have no idea it can be used to pay for the costs of senior housing and long term care,” Chris Orestis, president of Life Care Funding Group explained during the Assisted Living Federation of America annual conference, “and instead of letting the policy lapse or surrendering it because they can no longer afford the premiums, Life Care Funding Group can covert it into a long term care benefit.”  

Both organizations have linked websites and Facebook pages, and are reaching out to their respective client bases to generate more awareness about these Financial Assistance options.