For many hard-working adults, taking care of a loved one in need can be complicated and time-consuming, often requiring the aid of a trained caregiver. Whether it’s for chronic pain sufferers, aging parents or family members recovering from an injury, in-home care is a worthy investment that, unfortunately for some, simply isn’t in the budget.
At FirstLight Home Care, we never want the care of your loved ones to cause financial hardship and can help to find alternative forms of payment. As such, we are often asked whether life insurance pay for home care. For some instances, life insurance can often be used to pay for in-home senior and adult care. Here are a few things to know to get the financial assistance you need to extend a culture of care to your family.
Understanding Your Insurance Options and Coverage
Long-term care insurance is an insurance premium you can opt-in for to cover both nursing homes or use as private pay home care. It is used for people who require round-the-clock care or supervision, help moving around their home and physical assistance for daily living activities like using the bathroom or eating. Now, many insurance companies have combined long-term care insurance with life insurance to ensure that the policy benefits are always paid.
Other people may choose to have critical illness insurance. This form of insurance will pay out lump sums of money that the beneficiary can use for however they wish, such as covering the loss of wages or for home care assistance. Critical illness insurance will only cover serious health issues as per the policy, such as cancer, stroke or heart attacks.
Life Insurance Financial Assistance
For families figuring out how to pay for home care, life insurance could be an option. Here’s what to know:
Qualifications
Converting life insurance to what’s called a long-term care benefit plan is an option that all in-force life insurance types offer. These include term, whole, group and even universal insurance. Immediate need for care is a requirement that’s likely to be determined by the insurance provider, including if you are terminally ill, have a life-threatening diagnosis, are in a nursing home or need long-term home care services. For those working out who pays for home care services, life insurance can be a solid option.
Costs
Many providers offer this conversion at no additional cost. In fact, when most policies are switched, the subsidies begin helping immediately with no extra premiums and payments going directly to the care provider. Some insurance companies may require you to pay an extra premium to add this feature.
Payouts
Payouts for caregiving vary based on your life insurance policy and the number of months help is needed. Generally, this benefit payout is capped at 50% but some policies may allow you to take the full amount. Because the payouts are private pay, the money can be used for any type of caregiving, from assisted living to in-home care. Home care prices will vary depending on the level of care required – some only need visits a few times a week, while others may require 24/7 care.
Funeral Costs
You may think that converting a life insurance policy to pay for in-home care would eliminate funeral cost savings, but that isn’t the case. While the ultimate payout may be smaller, you’ll still receive a portion of your account to cover funeral expenses – typically $5,000.
Many are unaware that life insurance pay for home care can be an option. Paying for the care your loved ones both need and want can be tricky, but life insurance is designed to help. Most long-term care benefit plans are accessible at any time and are even recognized by Medicaid as a qualified financial vehicle.
To learn more about paying for high-quality in-home care using life insurance, contact your local FirstLight Home Care location to find out how to get started.