The Truth About Reverse Mortgages

One of my jobs for a very long time included working very closely with a financial advisor and an elder law attorney. I learned a lot from both of them. The most important thing I learned is that long-term care isn’t just about picking a nursing home or a home care agency. Long-term care is also about the legal and financial matters that almost always come up when families are trying to help an aging loved one make choices.

Most families cannot afford to privately pay for nursing home care or in-home care for very long. This wasn’t planned for or budgeted for prior to retirement. Planning ahead is getting more popular, but for our older generations, it wasn’t an option for various reasons.

Because of this I try to make sure I know what all of the financial options are for seniors and their family members. One of them is something that not many of us understand very well- a reverse mortgage.

Reverse mortgages have received a lot of press lately. NBC Nightly news, ABC, CBS….they have all run stories. Of course there are pros and cons to reverse mortgages, but interestingly enough, two large organizations support and advocate them, especially for seniors who need long-term care. The National Council on Aging and AARP both support the use of reverse mortgages in certain circumstances.

A study released by The National Council on the Aging (NCOA) shows that reverse mortgages can be used by over 13 million Americans to pay for long-term care expenses at home, allowing many to remain independent and in their homes longer.
The “Use Your Home to Stay at Home: Expanding the Use of Reverse Mortgages to Pay for Long Term Care” report, funded by the Centers for Medicare and Medicaid Services and the Robert Wood Johnson Foundation, also shows how reverse mortgages can alleviate financial pressure not only for individuals and families, but also for state Medicaid programs and the federal government. Increasing the market for reverse mortgages could save Medicaid $3.3 billion (with a four percent take up rate) annually by 2010.

A reverse mortgage is also called a home equity conversion mortgage. These loans are backed by the federal government (HUD and FHA). Seniors 62 and older are eligible to use this federal program. This is a “non-recourse loan”, which means that the heirs of the seniors are not responsible for repaying the loan. In fact, a reverse mortgage is a loan that does not have to be repaid unless both homeowners (assuming a couple) leave the home permanently, or pass away. No monthly payments are required. The senior is the one who gets paid.

Finally, the money seniors receive from a reverse mortgage is tax free, and does not interfere with SSI or Medicare benefits.
As with any financial transaction, there are other things to consider, and reverse mortgages aren’t for everyone.

However, for the senior or couple who are having trouble making ends meet, this can be a life saver. Some seniors are using the extra cash flow to pay for in-home care, adult day care, pay for prescription drugs, pay off credit card debt, and make much needed home repairs so that they can live safely and more comfortably.

Find a reverse mortgage specialist in your area, and network with them. They might be able to help a senior you know pay privately for care much longer than expected.
For more information visit www.aarp.com , www.ncoa.org , or www.reversemortgagenation.com .

If you would like a FREE REPORT on reverse mortgages, I would be happy to send you one. Just email me at valerie@nextgenfinser.com and I will email or snail mail your report.

Long Term Care Insurance How Much Should I Buy?

Long-term care insurance policies have got a assortment of characteristics and it pays to shop around. It is quite easy in the concluding old age of your life to run up extremely large care measures which could endanger your life savings, home and your children’s inheritance. Okay some people make not care about their progeny so much as is apparent by looking at the bumper spines of the gilded Recreational Vehicle Motor Homes; “we are disbursement our children’s inheritance!”

You need to inquire yourself not only; “How much long-term care insurance should I buy?” You need to believe on how much you might potentially need. For case you need a policy, which have an adequate day-to-day allowance. The current average for in home nursing is $135.00 per day. But the norm for coverage ranges between $100 and $150.00 per day.

The waiting and elimination time periods also can greatly impact the policy costs and premiums. People usually wait 30, 60, 90 days, as medicare usually pays in the beginning. You will have got a flimsy duplicate of coverage. The waiting clip period concerns the amount of time before you can get receiving coverage. These are of import factors indeed.

Benefit triggers are also important in these policies. They usually happen when you need aid with two or three day-to-day life activities such as as using the bathroom, getting dressed, taking a lavish or eating. Generally benefits are triggered when a physician have certified you that you in fact need this aid to work in these day-to-day life necessities.

Benefit or payment stoppages are also important which often happen when you are over a terrible unwellness or go a cancer survivor, as is now the norm. Or when you travel forth a nursing installation and go home. Many good policies stay activated for another 10 years to see you can work again at home if needed. Many policies have got a proviso which allows you to halt paying insurance premiums once you get benefit coverage, but not all and some necessitate you to begin paying again once you are out of the care installation or you no longer need in home care for your day-to-day life activities.

Most importantly make not purchase coverage if you experience pressured, believe about it first.

Is Your Financial Security at Risk?

The topic of insurance is not sexy by any means. Perhaps that's why so many people avoid addressing it. Another reason may be a bit more subconscious--the avoidance of future, indeterminable events, in favor of present-day issues with more certainty.

You are probably aware that many Americans are vastly under-insured. Home and auto insurance are important, and most people have that covered. What I am referring to, more appropriately, is your (1) life insurance, (2) long-term disability insurance, (3) liability insurance, and (4) long-term care insurance.

It is almost amusing to see someone walking around with a $60 cell phone that they have paid to insure, while their multi-million-dollar body is completely unprotected!

I said almost! Before addressing a client's investment situation, I always ask them to first consider the following four questions:

If you were to die, would your family have enough money to both pay off the house and live off the earnings from your savings?

If you were to injure your back, would you be able to cover the rehabilitation once your short-term coverage ran out?

If you were to develop a long-term debilitating illness, could you afford $90,000 per year for excellent home care?

If you’ve answered “no” to any of these questions, you might want to consider re-evaluating your level of protection.

© 2004 Matthew S. Clement, All rights reserved

Long Term Care and Long Term Care Insurance

A person might need long term care (LTC) if he/she cannot perform activities of daily living such as eating, taking shower or getting dressed by him/herself anymore. Certain disease can also make long term care necessary.

Long term care is not the type of care offered by a hospital or a doctor's clinic. Long term care can be received at home, in a nursing home or at an assisted living facility. About 55% of American who are 85 or older needs long term care.12 million older Americans are expected to require long term care in the year 2020.

Long term care is very expensive. Both nursing home care and home health care costs a lot. Unfortunately, a person's health plan and disability insurance usually do not cover the cost of long term care. Also, in most cases Medicare can't cover long term care either.

Long term care insurance is restively new, but nowadays there are more than 100 companies offering long term care insurance coverage, which is available through groups and to individuals.

Long term care insurance policies usually cover care in state-licensed nursing homes as well as certain home care services provided by certified home health agencies. Limits and exclusions of long term care insurance differ from policy to policy. Make sure you have a good understanding of what are covered and what are not before buying a long term care insurance.

Choosing Long-Term Care Insurance

A small over 60 percent of the folks who attain 65 old age of age will need some long-term care. The average nursing home stay ranges from 2-5 old age and costs on average of $135.00 per twenty-four hours currently in the United States. These averages and costs are going up small by small each year? Can you afford to be without long term-care insurance? You cognize there are over 35 million Americans over 65 in the United States and that number is rising also, this is owed to people living longer and the general tendency in demographics as less people are being born. It is the same general statement over societal security, which will be mulct depending on which twelvemonth you were born, but for the remainder of us? Well, it isn’t very pretty. Some in the mass media have got begun to name Sociable Security a ponzi scheme, which actually if my mathematics is right; is not so far from truth.

Most long-term care insurance policies include things such as as:

Nursing Home Care

In-Home Aid with Daily Activities

Adult Daycare and Other Community Based Programs

Assisted Living Services; including meals, wellness monitoring and transportation

Daily Nursing Supervision for those with Chronic Illnesses.

The existent issue is the complete disparity of insurance premium costs. It is best of course of study to purchase such as coverage long before turning 60 five if you desire any sense of a good deal on the coverage. The best clip to purchase coverage is between the ages of 51-60 where the average insurance premium for a good program will run you under $1000.00 per month. But you need to make your homework and store around. Additionally it might be smart to inquire for an “Inflation Rider” which will protect you from rising prices as the costs will be going up in the future, everyone is quite certain of that as the current tendencies look to be pointing in that direction.

If you are not careful and make not have got such as insurance it is possible to go through over out your full nest egg before you pass and that agency no heritage to the progeny and the last old age of your life in a poorness type setting. Please make believe on this.

The Top Ten Reasons Why People Need Long Term Care Insurance

10. The authorities isn't going to pay for long-term care at home, in a nursing home, or in an assisted life center. Medicare pays 100% of long-term care for 20 years and all but $95.00 per twenty-four hours for the adjacent 80 days--after that nothing. However Medicare only pays for skilled care and most long term care is not skilled care.

9. The national average cost for nursing homes is approximately $105.00 per day. Assisted life ranges anywhere from $50 - $90 per day. If you dwell on the Eastern Seaside you can easily pass $50,000 to $80,000 for a year's stay in a nursing home. These costs are perfectly capable of wiping out a lifetime of savings-not to advert the emotional consequence long-term care have on a family.

8. A Harvard University University survey showed that 69% of single people and 34% of married couples would wash up their assets after 13 hebdomads in a nursing home. 13 Weeks = 91 days!.

7. At age 65, a adult female have a 1 out of two opportunity of disbursement some clip in a nursing home. A adult male have a 1 out of three chance. In the lawsuit of men, mortality catches up with morbidity.

6. Medicaid kicks in lone after a person's assets and self-respect are gone. In many states the eligibility threshold for single people is $1,500 in assets. After all Medicaid is WELFARE.

5. Children would wish to help, but children often have got children of their own. They certainly can't discontinue their occupations to care for their parents.

4. Health rarely betters with age.

3. People can't purchase long-term care coverage at crisis clip or when they are ready to utilize it.

2. American's have got access to the best wellness care in the world, if they can pay for it.

1. Most People desire to take where they travel instead of having to travel where they are taken, and if independency is of import to them, they will need to have got either a large estate or adequate insurance.

Information quoted directly from:

* Type A Shopper's Usher to Long-Term Care Insurance , National Association of Insurance Commissioners.

* Long Term Care Companion Consumer Guide, Transamerica Occidental Life.

Term Life Insurance Explained

Term life insurance do not construct any sort of cash value, which makes it an original type of life insurance and considered pure insurance protection. Unlike whole life insurance, term life insurance is only impermanent and only covers a specific term, or a specific clip period of time in a person's life. Benefits will travel to a donee only if the insured individual deceases during that specific window of time.

Term life insurance is usually the cheapest manner for people to purchase a death benefit package on a per dollar basis. The ground for this is because the term will run out and the insurance company will not have got to pay out.

It is recommended that people should purchase term life insurance with the Theory of Decreasing duty in mind. The Decreasing duty theory is provided that the insured individual or people recognizes and understands that any and all financial duties are only impermanent and that they should purchase insurance to counterbalance for these responsibilities.

The easiest and simplest manner to purchase term life insurance is on an annual basis. The insurance premium to be paid is only the expected chance of the individual dying within that time period plus a few extra fees, such as as a cost and net income component. Because insurance companies are able to take whom they make up one's mind to ensure, the chance of person they take to see dying within the adjacent twelvemonth is extremely low, most people choose not to purchase one-year terms. An annual policy is not very cost-effective either. Many people take to travel with annual renewable terms (ART). In ART, a insurance premium is paid for the coverage of one twelvemonth and then is guaranteed to be continued each for so an Ten number of years, which could be anywhere from 10 to 15 to twenty old age or more, whatever the insured individual make up one's minds on. Even though this direction will cause the insured to pay a higher premium, they are more than likely to have got the benefits paid.

A degree term is a very popular word form of term life insurance that is a renewable annual term with a changeless insurance insurance premium for an Ten number of years. The old age in a term are usually 10, 15, 20, and 30 years. A degree term charges a higher insurance insurance premium for a longer amount of clip simply because as people get aged they are more than than expensive to ensure, and their age is averaged into the equation for the premium.

Even though they are more likely to be paid the benefits in the end, many people are uncomfortable with regular life insurance for one ground or another. For those types of people, term life insurance is an first-class choice. It gives people the option of having life insurance for a certain time period and can be renewed annually or in larger periods.