July 2015
Long Term Care Insurance and Reverse Loans
Financial Advisor Magazine published an article recently about the issue of how to manage the costs of aging when people have not purchased a Long Term Care Insurance policy.
It’s a looming crisis for many families as they are unprepared to help their senior parents with any physical or medical problems that will naturally occur as they/we get older. Unfortunately , most people haven’t considered buying the insurance ( And yes, it is expensive, especially if you buy it when you are much older) and now may find that they can’t qualify for it due to health issues and it’s simply financially out of reach.
Here is the remainder of a summary of the article from Financial Advisors Magazine.
Financial Advisors: Reverse Mortgages Provide Alternative to LTC Insurance
Posted By Cassandra Dowell On July 7, 2015 @ 3:35 pm In News,Reverse Mortgage
“A unique feature of the HECM reverse mortgage many are surprised to learn about is its growing credit line,” FA Magazine says. “As the borrower ages, the reverse mortgage line of credit continues to grow, providing access to significantly more funds. This makes reverse mortgage a superior funding tool versus a traditional HELOC, which doesn’t grow over time and requires monthly payments.”
The article encourages advisors to check with a reputable reverse mortgage lender to see what resources they have available to help determine whether a reverse mortgage is a worthwhile option for their senior clients.
“Since senior care needs often come in the form of an unexpected broken hip, heart attack, etc., the best strategy for millions of seniors may be to set up the standby line of credit in advance, so funding is ready when needed,” FA Magazine says. “In the meantime, the credit line grows, steadily increasing available funds over time.”
Using the money from a Reverse loan can take away the worry and stress of paying for professional services that otherwise they could not afford. And as a reminder, the property remains in the borrowers name, the Bank doesn’t “take the property back at the end of the loan” and costs have come down on loan program.
It’s an ideal solution to pay for the costs associated with aging.
Financial Advisor Magazine
Financial Advisor Magazine recently published an article discussing the serious need for Long Term Care Insurance for our aging population. However, many people have missed the window of opportunity to purchase it and now due to possible health problems, they are not necessarily a qualified candidate for the insurance.
And many people don’t know that Medicare will not pay for any long term care events. And often it falls to a family member to become the caregiver of their parent, which is very stressful for the entire family, as it disrupts their own lives and frequently they have to use their own money to pay for any expenses for their parent.
Personally, I purchased mine quite some time ago and it certainly gives me the peace of mind knowing that I have it in the event, some time in the future I become unable to care for myself or if I am disabled. Of course, that’s not my plan as I age, but it is a very serious possibility for many people.
One solution that was presented, was to use funds from a Reverse loan to either self-insure yourself or if you do qualify for the insurance but can’t afford it, use money from a Reverse loan to pay the premiums.
Here is a shorter version of the article that I will place into, two posts.
Financial Advisors: Reverse Mortgages Provide Alternative to LTC Insurance
Posted ByCassandra DowellOn July 7, 2015 @ 3:35 pm In News,Reverse Mortgage
“As America’s aging population continues to grow, the need for advanced senior care planning becomes increasingly dire.
Yet long-term care insurance isn’t always an option for todays aging Americans, says Financial Advisor Magazine in a recent article. In those instances, advisors should consider recommending a reverse mortgage, taken as a line of credit.
“Clients over age 60 may have missed the window to purchase affordable long-term care insurance,” notes FA magazine, adding that each year after age 60 premiums become “extraordinarily high” and it becomes less likely for the applicant to medically qualify.
When long-term care insurance isn’t an option, advisors should consider recommending a standby Home Equity Conversion Mortgage (HECM) line of credit, FA Magazine suggests, explaining that borrowers are not required to pay monthly loan payments as long as they live in the home as their primary residence and continue to pay taxes, insurance and home maintenance.”