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What Your Mom or Dad Need To Know – Elder Care Options

Jan. 23, 2020

According to the Administration on Aging, family members are the primary providers of long-term elder care in the United States.

Being a caretaker places a heavy burden on family members both emotionally and financially. For this reason alone, it makes good sense to approach your loved one with a compassionate and informed discussion regarding long-term care options.

Emotionally Strong And Compassionately Honest

We encourage you to have a candid conversation about long-term care, even though you might feel uncomfortable discussing the topic. You will also need to be emotionally strong and honest in discussing the subject of long-term care.

The earlier you have the discussion the better. The last thing you want is to wait until your loved one is suffering from dementia or some other form of cognitive disability which will impair your loved one from fully understanding and being able to make informed and intelligent choices.

Remember the goal of discussing long-term care is to provide an opportunity for the elder to make meaningful choices about their future.

Know the Basics of Elder Care

We suggest you perform some basic research into the types of services and resources available for seniors. For example, you should know the distinguishing features of Medicare and Medicaid. You should understand how Social Security works in this context and know something about the types of residential settings available to seniors and their respective price range.


Medicare is a Federal health insurance program that pays for hospital and medical care for elderly and certain disabled Americans. The program consists of two main parts for hospital and medical insurance (Part A and Part B) and two additional parts that provide prescription drugs (Part C and Part D).

Supplemental Coverage – Medi-Gap Insurance

There is also supplemental coverage for medical expenses and services that are not covered by Medicare. These services are offered through “Medi-Gap” plans. Medi-Gap consists of 12 plans that the Centers for Medicare and Medicaid Services authorized for private companies to sell and administer.


Medicaid is a hybrid federal and state insurance program that helps pay health care costs for low-income people of any age. Medicaid helps with medical costs for people with limited income and resources. Medicaid also offers benefits not normally covered by Medicare, like nursing home care and personal care services.

Social Security

Social Security is the federal program that provides retirees with a very modest income and is based on the person’s work history. Social security assists people over the age of 65.

Types of Long Term Care Facilities

You will also want to know what types of facilities are available for seniors. You should know the differences and the respective costs associated with board and care, assisted living and skilled nursing facilities.

A Source For Needed Cash

Clearly, for many seniors living on a fixed income without a nest egg presents a serious financial risk if later you need to access emergency funds. The last thing you want is to spend the rest of your retirement in debt. For this reason, many seniors are choosing to cash out of their life policy to beef-up their savings, cover unexpected expenses, and have enough to live comfortably. For other seniors, those that were relatively high-income earners, the extra money can be a great way to do some traveling and visit loved ones.

Benefits of Cash Surrender

According to the 2014 Census Bureau, 45% of adults ages 65 and older had incomes twice below the poverty threshold. No doubt the problem of elders living below the poverty line has grown to unacceptable levels.

With the annual cost of long-term elder care reaching into the six-figures, unless you are one of the lucky few that are fortunate to carry long-term health insurance, your financial options are quite limited. In short, you may find yourself too old to work and too broke to live comfortably.

With the cash surrender of your policy, you can choose to give your family their inheritance early and while you are still alive.

Much can be said for living a comfortable life debt-free, including no longer having to pay your monthly insurance premiums. In addition, having access to cash reserves can be used for travel, hobbies or just having a more comfortable life.

In conclusion, obtaining the cash value of your insurance can be a welcomed source of income for cash-strapped seniors. However, before making a final decision to cash out, borrow against, or keep the status quo, make sure you obtain expert advice from a financial advisor and investigate the “Cash-For-Policy” company that is making the cash offer to ensure they are reputable and trustworthy.

We recommend consulting with a financial expert trained in life insurance conversion-to-cash policies and get all the details including the risks and benefits of converting your policy to cash.