LIFE SETTLEMENT AND LONG-TERM CARE
As the number of baby boomers heading towards retirement starts to increase, so will the importance of long-term care and life settlements. Long-term care provides services that act as an important support system for many elderly citizens who need help with daily living activities. While long-term care is most undoubtedly a benefit to families who need help caring for older individuals, it may also present a severe financial burden since it is typically not covered under Medicare benefits. Long-term care comprises of both medical and non-medical services. It often entails helping senior citizens with everyday living activities which may include anything from utilizing the toilet to shopping for groceries.
LONG-TERM CARE COSTS
The care provided in daily activities like these are believed to be non-skilled or custodial attention and are not paid by Medicare. Based on research conducted by Genworth Financial in 2006, long-term care costs surpassed $70,000 per year on average. A comparable study conducted by Genworth in 2007 revealed little difference in pricing for one bedroom in a nursing home. The typical annual cost for a private room in a nursing home was $74,806. With the current cost of living in addition to the costs of long-term care for elderly family members, much of the financial burden is placed the family.
LIFE SETTLEMENTS FOR LONG-TERM CARE
Many families do not have the funds to support long-term care. With limited alternatives to explore, they are often compelled to take out loans, taking on additional debt to take care of their senior citizen needing long-term care. Now there’s another solution that has emerged, called life settlements. If you are unfamiliar with the term, a life settlement is the sales of a current life insurance policy contract to a third party for a sum exceeding the money surrender value provided by the life insurance provider. When this transaction is complete, the person can spend the money acquired in whatever way they see fit.
The investor that purchased the policy may continue to pay the premiums until the death of the insured, after which they’ll collect the death benefit from the policy. However, there are two other alternatives worth mentioning for disposing of a life insurance policy contract. In the first option, the person may both cease paying the premiums and allow the policy to lapse, receiving nothing. However, in the second alternative, the person may sell the policy back to the insurance provider for the cash surrender value.
A LIFE SETTLEMENT BENEFIT
Overall, the sale of the coverage allows the policyholder to keep a suitable standard of living and continue the rest of his years with dignity. Personal welfare and comfort rank high on the life insurance policy sales’ consideration list. At one point the only party profiting from this situation was the original insurance provider. They obtained premiums to get a certain number of years, and due to the lapse, they faced no further obligation to pay the face amount. Meaning the policyholder just lost everything, regardless of the amount of money invested in the policy. Now, with a life settlement, it is possible to get the much-needed funds to pay medical expenses, living expenses or meet long-term care responsibilities.
Call Trust Life Settlements today. One of our specialists will help you determine if a life settlement is a right choice for you!