|Pillar Financial Corporation offers a unique package we call the Senior Care Package and includes the following:|
|Contact Pillar today to find out more about putting together a Senior Care Package for your particular needs.|
Review more information about the Senior Care Package below:
Financing of Long-Term Care
The Pillar Mortgage exclusive Senior CARE Program
Mr. Hutton is 74 years old and his wife is 72 years old. Their home has been appraised at $300,000 and they own it free and clear of mortgage. They qualify for a reverse mortgage and are eligible for a lump sum of cash in the amount of $138,000 or a guaranteed income of $900 per month for as long as they live in their home. If they purchased an annuity with the cash, they would receive $960 per month for the rest of their lives wherever they live. If they choose to receive the money from their reversed mortgage in the line of credit option, the unused portion would grow at the same rate as their loan balance. They would receive the interest earned on a monthly basis ($675) or on an annual basis ($8,400) and still have the $138,000 available as reserve. They can also mix or match those options to provide them with the most appropriate solutions for their needs. Regardless of which option they choose, the reverse mortgage provides several practical options to fund either their long-term care insurance policies or their long-term care services. The Senior CARE Package provides both of the products in one!
There are three basic ways to pay for long-term care in a nursing home: Medicare, Medicaid or private pay (out of pocket or by using long-term care insurance and a reverse mortgage).
Medicare is the federal program offered to those who are needing a skilled level of care after a 3 day hospital stay. Skilled care is best described by the type of care you need due to a hip fracture or stroke - therapy on a daily basis.
Medicare is limited in the number of days it will pay - up to 100. Medicare pays 100% for the first 20 days (after the 3 day hospital stay and if skilled care is needed), beginning on day 21-100 there is a copayment required with Medicare. Most Seniors have a Medicare Supplement policy. Medicare supplements will pay in conjunction with Medicare. Once Medicare stops paying for care, most supplements will not continue to pay.
If you have exhausted Medicare payments the only other options are Medicaid and paying out of pocket (private pay). Medicaid is available for those individuals that are low income or have limited resources. Medicaid is the state welfare program and has limitations as to the amount of assets you can own and the amount of income you may receive each month before you are eligible.
The federal government has instituted restrictions on the transferring of assets out of an estate to qualify for Medicaid. There is a look back period of 36 months or 60 months if a trust has been established. A law was passed in 1996 making it a crime to shift assets to become eligible for Medicaid.
In 1996 the average cost for a year in a nursing home averaged between $36,000 and $50,000. This can be financially devastating. Especially if a patient stays the average of 3 years or even longer. Some patients have spent more than $100,000 or even $500,000 on long-term care expenses.
Besides paying out of your own pocket you can purchase long-term care insurance. This insurance must be purchased prior to needing long-term care. The eligibility for the insurance is based on your current health. Therefore if you are already ill, you probably will not be insurable.
Most financial planners recommend that LTC insurance be purchased in your late 50's or early 60's. In this range the cost is quite affordable and your health is probably still pretty good. The premiums are based on your age, health, and the type of plan that you purchase.
LTC Insurance Benefit Considerations
When purchasing LTC Insurance you must make three main decisions:
Daily Benefit - the amount of money you will receive from the insurance company on a daily basis for your care. You usually can select between $50 and $250 per day. Find out what the current cost of care is in your are and it will help you make the decision as to what daily benefit you want. (also see inflation protection below).
Benefit Period - the length of time you will receive payments from the insurance company once you need care. You usually can select a specific number of years (2,3,4,5,) or lifetime plans are also available. The average length of stay in a nursing home is 2 1/2 to 3 years. Note: A three year plan will be less expensive than a lifetime plan.
Elimination Period (deductible) - the number of days that you will be responsible for paying for your care before the insurance begins to pay. This works like most insurance deductibles except it is stated in a number of days instead of dollars. Most plans have a variety of options like 0 days, 20 days, 60 days, or 100 days. Be sure to check if this deductible is once in a lifetime or if it can repeat.
Also, there are three optional decisions that can be added to your plan.:
Inflation Protection - this ties back to your daily benefit and allows it to grow on an annual basis to help keep your plan in step with inflation. It is built into your original premium and therefore will increase your annual premium. You may have choices of 5% simple or 5% compounded. You do not have to add this to your plan - but it is certainly recommended if you are younger when you buy your policy.
Home Health Care Coverage - some policies will also give you the option of receiving insurance benefits in your own home. This options will allow you greater choice as to where your care can be paid for by the insurance. It may cover community care like Adult Day Care Centers and Assisted Living Facilities as well as care in the home. This option will increase your premium.
Nonforfeiture - this option provides some form of paid-up benefit if the policy should lapse. This option increases your base premium.
I hope this will give you some direction when comparing LTC policies. Always look for a strong and reputable company and also make sure your agent is knowledgeable about long-term care issues as well. Shop around and educate yourself and use your best judgment when selecting a plan. Look for plans that are Tax Qualified.
We are licensed with a number of companies and based on your age, current health condition and the type of plan you want they we can get a quote.
News Release from the National Reverse Mortgage Lenders Association
May 10, 2001
FOR IMMEDIATE RELEASE
Contact: Glenn Petherick, Director of Communications,
Seniors Discover New Health Care Financing Options in Reverse Mortgages
Free, New Consumer Guide Available
Washington, DC Paying for health care has become an important issue for older Americans and their adult children. As medical costs continue to rise for prescription drugs, in-home care, and physical rehabilitation, seniors are having to shoulder a larger share of the financial burden or turn to their children for help.
Fortunately, many seniors are discovering a relatively new solution for covering health care costs. It’s a reverse mortgage, a unique loan that enables senior homeowners to convert part of the equity in their homes into income without having to sell the home, give up title, or take on a new monthly mortgage payment. Reverse mortgages are available to individuals 62 or older who own their home. Funds obtained from the reverse mortgage are tax-free.
Reverse mortgages have already helped out seniors like Dorothy Rogers of Hampton, NH, and William Ellis of Vancouver,WA, whose stories are profiled in a new booklet offered free from the nonprofit National Reverse Mortgage Lenders Association in Washington, DC. The booklet, called Using Reverse Mortgages for Health Care, may be obtained by contacting NRMLA (toll-free 1-866-264-4466, 202-939-1792, and asking for the health-care guide.
After her husband passed away, Ms. Rogers used a reverse mortgage to help make ends meet. “I had a horrendous time paying for things,” she said. “Every time I went to the grocery store, I’d have to choose between prescription drugs or food. In the end, what I was getting from Social Security was going almost entirely to medicine. I thank God every day that I got a reverse mortgage.”
When Mr. Ellis’ wife, Beulah Marie, suffered a debilitating stroke, they decided to build a first-floor bedroom in their house to make her more comfortable. “I didn’t want to get another mortgage because that would have meant making a monthly payment, so the next logical step was to get a reverse mortgage,” commented Mr. Ellis. “The reverse mortgage really helped out.”
“We’re hearing more stories every month about how reverse mortgages are helping seniors live more comfortably and maintain control of their financial lives,” commented Peter Bell, president of the National Reverse Mortgage Lenders Association. “In a very short time, we expect that the reverse mortgage will gain recognition as an important personal financial management tool due to its versatility and the powerful impact it can have on seniors’ lives.”
Borrowers can choose to receive the funds from a reverse mortgage as a lump sum, monthly income (for up to life or as long as they occupy the house), line of credit, or a combination of monthly income and line of credit. Borrowers can use the funds any way they wish for home repairs and improvements, medical costs, in-home care, education, or supplemental retirement income. Borrowers make no monthly payments on a reverse mortgage during its term. The loan becomes repayable when the borrower sells the home or permanently moves out. In addition, the repayment amount can't exceed the value of the home.
Seniors can use funds from a reverse mortgage to pay for a variety of health-care related expenses, including:
To educate consumers about reverse mortgages, NRMLA has created a second booklet called The NRMLA Guide to Reverse Mortgages. This free booklet answers frequently asked questions, provides detailed information on the loan origination process, and includes a Code of Conduct for lenders, so that consumers can know their rights when working with a lender. The booklet may be obtained by calling NRMLA at 1-866-264-4466 (toll-free) or 202-939-1792, and asking for the Consumer Guide.
Reverse mortgages are originated largely by private lenders. The most popular type of reverse mortgage product is the Home Equity Conversion Mortgage (HECM), which is insured by the Federal Housing Administration (FHA), an arm of the U.S. Department of Housing and Urban Development (HUD). More than 40,000 HECMs have been made since 1989.
NRMLA is a nonprofit trade association, based in Washington, DC, whose mission is to support the continued evolution of reverse mortgages as an important financial option for senior homeowners, while educating both its members and consumers about the varied applications of this unique loan. Members sign a Code of Conduct pledging to abide by guidelines that assure fair, ethical, and respectful practices in offering and making reverse mortgages to seniors. For more information on reverse mortgages or for a list of lenders in each state who have pledged to abide by NRMLA’s Code of Conduct.
You've worked hard to provide for your family and to build your nest egg. But what will happen to your assets when you try to pass them on? You may believe your Will takes care of this transition for you, but a large value of your estate may be lost to death taxes and estate settlement expenses.
Illinois Mutual has designed two unique Whole Life policies with the Mature Market in mind - Simplified Issue Whole Life & Single Premium Whole Life - that can assist you in making a tax efficient transfer to your desired beneficiary.
Simplified Issue Whole Life is an annual premium policy that provides guaranteed premiums and death benefits. This policy would be ideal for those who wish to provide a grandchild's college education, finance home improvements, reduce credit or mortgage obligations, fund a new business or pay for final expenses and taxes.
Single Premium Whole Life offers all the advantages of traditional whole life with the payment of a one-time premium. This policy would be ideal for those whose financial goals include gifting, charitable giving, trust creation, estate planning or wealth transfer.
Both policies are for issue ages of 45 to 85 and include an Accelerated Benefit Rider* at no additional premium. This rider provides access to policy funds for financial needs that arise from terminal illness or nursing home confinement.* Both products are non-illustrated, with guaranteed face amounts and guaranteed cash values and can be issued with a death benefit as low as $5,000.