Financial Options for Alzheimer’s Patients | Alzheimer’s disease is a progressive disease that affects a person’s memory, brain functions, and physical abilities. In the early stages of Alzheimer’s disease, it’s common for people to have occasional memory lapses or appear forgetful. As the disease progresses, it may affect a person’s ability to recall critical information, make mathematical calculations, and perform routine tasks, such as tying shoelaces. Some people with Alzheimer’s are also affected by balance issues and loss of coordination, making it difficult for them to move safely.
There’s no cure for Alzheimer’s disease. It’s a form of dementia, but unlike dementia, Alzheimer’s is a fatal illness. It’s one of the leading causes of death, claiming over 122,000 lives in the United States in 2018. Due to the nature of the disease’s symptoms, people with Alzheimer’s disease have expensive personal and healthcare needs. Thankfully, people with Alzheimer’s have financial options they can consider to ensure they have the money required to obtain the services they need. Continue reading to learn more about some of the financial options for people with Alzheimer’s disease.
People with Alzheimer’s who have a life insurance policy can consider pursuing a viatical settlement. What is a viatical settlement? A viatical settlement is a financial option that’s only available to a person who has a terminal or chronic illness and has a life insurance policy. It’s possible for that person to work with a viatical settlement broker to sell their life insurance policy. The viatical settlement company must ensure the viator qualifies for a viatical settlement before finding a third party to purchase the insurance policy. The buyer pays a lump sum of cash that’s higher than the insurance policy’s cash value but lower than the policy’s death benefit. The third party buyer then assumes responsibility for any outstanding policy payments owed and appoints a new beneficiary who will receive the death benefits upon the original policyholder’s death. Sellers must have a life expectancy of two years or less to qualify for a viatical settlement, but people with Alzheimer’s may qualify because their disease is terminal.
Alzheimer’s is one of two types of senile degeneration of the brain, affecting a person’s mental abilities, vision, muscle strength, posture, balance, coordination, behavior, and judgment. In comparison, dementia involves age-related mental decline and memory loss. People with Alzheimer’s experience psychological deterioration that makes it hard for them to learn and create short-term memories. The disease’s symptoms eventually make it impossible for people with Alzheimer’s to care for themselves or manage routine tasks, which is why they may need to hire personal care aides or move to a residential facility. Viatical settlements offer multiple benefits. The money from the settlement is tax-free, and sellers can use the funds for any purposes they choose. They may opt to use the funds to pay for their medical expenses or personal care needs.
Life settlements are similar to viatical settlements, but the policyholder does not need to have a terminal or chronic illness to sell their insurance policy. Sellers turn to a licensed broker who locates a third party who buys the insurance policy. The seller receives a lump sum payout in exchange for their policy. The buyer assigns a new beneficiary who receives the policy’s death benefits when the seller dies. Like viatical settlement buyers, they’re also responsible for making any remaining policy payments owed.
The critical difference between a viatical settlement and a life settlement is that third-party buyers pay more for viatical settlements due to the decreased life expectancy of the viator. Since individuals don’t need to be terminally or chronically ill to qualify for a life settlement, buyers invest less because they can’t expect to obtain the expected death benefit within a few years of purchasing the policy. Both viatical settlements and life settlements pay more than the cash-in value of an insurance policy, ensuring that sellers receive more money from either settlement type than they would by simply cashing in their policy through their insurance company.
People with Alzheimer’s may obtain a reverse mortgage, giving them access to financial resources while remaining in their own homes. One of the drawbacks of a reverse mortgage is that people have a limited time to repay them after moving out of their house. Individuals with Alzheimer’s may also opt to sell their home instead and use the funds to pay for care in an assisted living facility or downsize to a smaller residence and use the remaining funds to cover medical bills and pay for caregivers. However, selling their home may not be an option if they have a spouse who resides there.
People with Alzheimer’s can access the funds they need for their medical and personal care by pursuing a viatical settlement, a life settlement, or selling their home. Their options may be influenced by their health status and the needs of other family members.