When dealing with a loved one who has a diagnosis of dementia, it’s an unfortunate fact that alongside all the other worries, families often also have to think about the financial implications of this chronic condition.
Put simply, a diagnosis of dementia almost certainly means the eventual need for long-term care, whether at home or at a facility.
Ideally, you’d be planning for your aging parents’ care even before any medical diagnosis, as most all aging parents require some level of additional healthcare expense. Of course, this planning doesn’t always happen, and the next best time to have these discussions is immediately upon receiving the diagnosis. If your loved one is just developing the beginning signs of dementia now, you likely have a number of years before they might need full time care — this gives you a chance to get your finances in order.
This financing usually happens through some combination of the aging parent’s retirement savings, and if needed, help from the rest of the family. Your loved ones may or may not have sufficient savings for their retirement — about 28% of people in their sixties have less than $50,000 to their name.
Some other financing options:
Long Term Care Insurance
This unique type of insurance helps to cover the ongoing costs of care for those with chronic conditions. Note that you will likely not qualify for a long term care policy if you have already been diagnosed with a chronic condition. So, this is the kind of thing that is best to consider and obtain when your loved one is still healthy.
Life Insurance Conversions
During one’s prime years, a life insurance policy is meant to financially protect dependents in the case of one’s death. As the person gets older, this protection for others may no longer be necessary, but the policy should not necessarily be surrendered — instead it can be converted to a Long Term Care Benefit plan or Life Care Funding.
Community Care Program
Offered through the Illinois Department on Aging, the program helps senior citizens, who might otherwise need to be placed in a nursing home, remain in their own homes by paying for in-home care. The requirements are that an individual must be 60 years old or older, have non-exempt assets of $17,500 or less and have an assessed need for long-term care.
Wartime veterans and their surviving spouses, 65 years and older, may be entitled to a tax-free benefit called the Aid and Attendance pension provided by the U.S. Department of Veterans Affairs. Many people don’t know about this benefit!
Many seniors without significant other savings still do have significant equity in their homes. The reverse mortgage enables them to liquidate that equity and receive monthly payments for years to come. When the person passes away, the family has the option to sell the home and keep the portion of equity still remaining, or to repay the reverse mortgage and keep the home.
While there are a number of options for funding long term care, this can be a confusing field to navigate, particularly when you are also trying to take care of your loved one and spend quality time with them.
To get a better idea of where your loved one stands right now, and what level of support you would ideally be offering him or her, check out our Home Care Quiz, which assesses 6 key areas of well being:
- Eating Habits
- Personal Hygiene
- Care of Home
- Safety/Mental Attitude
At the end of our Home Care Quiz, you’ll also have the opportunity to schedule a 30-Min virtual one-on-one session with Scott, our Memory Care Program Director, to get all your questions answered!