Can I Use a Life Insurance Policy to Pay CCRC Deposit?

 In Long-Term Care Planning

Question:

I would like to enter a continuing care retirement village, currently for independent living but with access to assisted living and skilled care as needed. The down payment is $55,000. I just sold my condo because I couldn’t live there on the 3rd floor and there was no equity. I have $1,000 remaining in my IRA and receive social security of $2,300 per month and $500 a month from another pension plan. Since I have no money except for a term life insurance policy of $100,000 that ends at age 80, could I get an elder care loan to pay the down payment? Or extend the term life insurance policy to age 95 and let the continuing care facility become the beneficiary for that loan when I die?

Response:

The answer really depends on the village. You’ll have to ask them. I’m not sure what the elder care loan would be, but the life insurance commitment sounds interesting. I’m sure the facility will want to be sure that you can continue paying the premiums on the policy and what they’ll do if you live past 95. They may require that you transfer ownership of the policy to them so they can ensure that they will be paid and that they can pay the premiums if you stop for any reason. I like your creativity and resourcefulness.

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