About a month ago, an issue of Investment News contained an article discussing the importance of long term care options for clients. According to a study by the American Society on Aging, more than 70% of all Americans reaching age 65 will need long-term care at some point in their lives.
Common health issues that are driving this are heart problems, hip fractures, strokes and alzheimer's disease. These conditions, and others, are likely to place large financial burdens on seniors and their families. Since the majority of people are living longer, there is added financial strains that have not created a large issue in the past when life expectancies were shorter. Financial advisors need to adapt to this situation and focus on long-term care planning needs not just the other planning needs such as retirement, estate planning, and education funding. In regards to long-term care, their are costs involved in every area.
Some studies from MetLife revealed the national average private-pay base rate for an individual residing in an assisted living facility is $2,095/month or almost $35K per year. The studies also hshowed the national average for a private room in a nursing home is $206/day or over $75K per year. A semiprivate room in a nursing home saves a little mney, but still weighs in at $183/day or over $66K per year.
There are only two ways to finance these long-term care burdens. You can pay out of pocket or obtain a long-term care insurance policy. LTC is not covered under health insurance or Medicare. Medicaid does cover most long-term care provided today, but there have been recent changes to the law that make qualifying for Medicaid more difficult than in the past. So, the question of the day has become...Where will the money come from to fund clients' long term care needs?
This is where proper equity management and mortgage planning can help. There are several types of strategies that you can use to handle your own and your clients' long term care needs. By learning and applying these strategies, you can provide added value to your clients. Here is a list of some of the strategies that can help...
- Reverse Mortgages
- Interest Only Mortgages and Option ARMs
- Interest Only 2-1 Buydown Product
- Home Ownership Accelerator program
These are just a few of the products available to help you utilize your mortgage to fund your long-term care needs. There is no one product that is best for everyone, so you will need to get with a professional mortgage planner to decide what strategy works best for you.
If you want more information about these strategies or any others, please contact me via AR or visit my website here... www.solidrockmortgage.com.
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