FINANCIAL PLANNING

Many families engage a professional financial planner to help map out the family’s financial future; however, few personal financial plans anticipate the possibility of a dementia diagnosis.

That change in life events will dramatically alter the family’s financial future, raising questions like:

  • How will our income change when (the dementia patient) is no longer able to work?
  • How much will it cost for home health care in the middle stages and a senior living community in later stages?

The following articles provide some guidance for families whose financial plans must be adjusted to accommodate a dementia diagnosis:

Click Here To Visit nia.nih.gov

Clcik Here To Visit alz.org

Some life insurance policies have provisions that permit a cash advance against the death benefit BEFORE the death of the insured person. Further, a special type of financial contract called a viatical settlement allows the policyholder to sell the life insurance benefit to a third party and receive a discounted amount of the death benefit now.

The following article describes how viatical settlements work:

Click Here To Visit investor.gov

Although they have similar sounding names, there are two very different insurance products that can help provide financial assistance to a family member diagnosed with dementia:

  • Long-term disability insurance (LTD) provides for a replacement of lost wages for a worker who sustains an injury or illness and is no longer able to perform the job he held at the time of the injury or illness. These policies may be sold either as group policies through an employer or as individual policies. Unlike Social Security, whose definition of disability is very restrictive, LTD policies usually require only that the insured person be unable to perform his current job.
  • Long-term care insurance (LTC) pays for home health care and/or senior living community expenses if there exists a medical necessity. With a senior living community costing upwards of $5,000/month, an LTC policy can provide tremendous financial relief to a family having received a dementia diagnosis. Unfortunately, an insurer will be reluctant to sell an LTC policy to anyone who has already received a diagnosis of dementia, certain people with a family history of dementia, or prospective customers who are in their 50’s or older.

For families who lack long-term care insurance or adequate personal financial resources, the cost of home health care or a senior living community can be overwhelming. For some families, this financial burden forces them to consider selling their home. But what if the dementia patient is the only member of the family who needs to move into a senior living community? The family caregiver will still need a place to live until she moves into a senior living community herself someday later.

Many families have limited liquid financial resources, but have a great deal of equity in their homes. One alternative to selling that home is a reverse mortgage. With a reverse mortgage, the homeowner borrows against the equity value of the home without having to sell or move out of the home.

The following articles describe how reverse mortgages work in Texas and summarize the basic pros and cons of such borrowings:

Click Here To Visit consumer.ftc.gov

Click Here To Visit experian.com

“Your love is the anchor in a storm.”