As the average life expectancy continues to climb for aging parents, more Baby Boomers will be shouldering the responsibility for their care.
According to a recent survey conducted the Associated Press-NORC Center for Public Affairs Research, two-thirds of older Americans say they’re confident in being able to rely on family to care for them as they age.
But while aging seniors may have an expectation that their Boomer children will step in when the time comes to physically care for them or help them manage their financial affairs as cognitive abilities decline, a 2015 Harris Poll survey found that 42 percent of Boomers haven’t even discussed the issue with their parents.
At Trust Life Settlements, we encourage seniors and their Boomer children to have the “caregiving conversation” as soon as possible. Take the time to explore all the options based on the financial resources available, and formulate a tentative action plan so there will be no surprises when the time comes.
One of the most important aspects of that conversation should center around financial planning and insurance coverage.
1. Does the aging parent own long-term care insurance?
2. Where does the aging parent keep important financial and legal documents?
3. Does the aging parent work with a financial advisor or estate attorney?
4. Has the aging parent appointed a Power of Attorney and Health Care Surrogate to make decisions should they become physically or mentally incapacitated?
5. Does the aging parent own a life insurance policy? Have they considered a Life Settlement to help pay for daily care as they age?
If the aging parent owns a life insurance policy, the adult children should explore whether the senior would qualify for a life settlement by using the pricing estimate form on the Trust Life Settlements website.
The proceeds from life settlements can ease the caregiving burden on Baby Boomers, whether care is delivered in the home or at an assisted living facility. Careful thought and planning should go into how the proceeds from the settlement will be used to support the senior’s care, which is why creating a budget is the first step.
Let’s assume that a senior sells a $250,000 life insurance policy and receives a cash settlement of $70,000. The adult children will want to develop a budget for the senior’s care so that paid caregivers can be brought in to share the responsibility for the senior’s care.
Paid caregivers charge on average $20-$25 per hour, depending on the geographic location. Expenses associated with round-the-clock care can mount up quickly and deplete the senior’s resources, so it’s important to lay out an affordable caregiving schedule that everyone can agree with.
For Baby Boomers who do not live near their aging parents and who must rely on others to assist them in managing their parents’ affairs, it is often necessary to hire a daily money manager (DMM). As the retiree’s cognitive ability to handle finances diminishes with age, they may forget to pay bills, become confused in reading their banking statements, and lose the ability to manage routine paperwork. Any of these issues can make them vulnerable to scammers who target seniors. Depending on where the retiree lives, DMMs charge $75 to $150 per hour. Many daily money managers choose to become certified through the American Association of Daily Money Managers, which recently published a helpful guide for Baby Boomers who manage money for their aging parents.
If you are a Baby Boomer and would like to learn more about how life settlements can help you finance care for your aging parents, contact us at 800-216-2513.