How to Pay for Senior Care with Life Insurance


A Living Benefit program is a lump sum payment that is available to people who meet specific medical criteria. A Living Benefit program makes it possible for you to receive up to 50 percent of your life insurance policy’s death benefit while still reserving coverage for your family. For example, if you have $200,000 of coverage, up to $100,000 can be advanced secured solely by your policy. You do not lose your life insurance and your beneficiaries remain the same. With your cash advance, you can pay for your senior living expenses. For those who no longer want or need a life insurance policy, there is an alternative available where you can get paid the value of your policy and terminate any interest you have in the policy.

Q. What Types Of Senior Housing Qualify?

A: Proceeds from a Living Benefit program can be used to pay for the following kinds of care:

  • Assisted living
  • Memory care
  • Rehabilitation care
  • Nursing home care
  • Hospice care
  • Home care

Q. How Does A Living Benefit Program Work?

A: The Living Benefit is a loan secured solely by your life insurance policy. There is no other asset required and your credit history does not matter. There are no out-of-pocket fees or expenses with the loan and the interest is not paid out of pocket. The entire loan ultimately gets repaid from the death benefit of the policy. The difference between the loan and the death benefit will go to your beneficiaries.

Q. Who Pays The Life Insurance Premiums Of My Policy Going Forward?

A: A senior financing specialist like Elderlife Financial can help guide you to the most flexible option available to you and in all cases, all of your policy’s future life insurance premiums will be paid for you.

Q. Does A Living Benefit Program Work With Term Or Group Policies?

A. Yes. The Living Benefit program works with all types of life insurance policies including Term, Universal Life, Whole Life and Group policies.

Q. How Do I Qualify For A Living Benefit Program?

A. To qualify you must have a life insurance policy with a death benefit of at least $100,000.

Q. What Information Do I Need To Provide To Secure A Living Benefit?

A. First, you will need a copy of your medical records along with a recent life insurance policy statement to approve your loan. All of this information will be gathered during the application process.

Q. How Much Can I Receive From My Life Insurance Policy?

A. You can receive a cash advance for up to 50% of your life insurance policy’s death benefit.

Q. What Interest Rate Is Charged On The Loan? Are There Other Fees?

A. There are no out-of-pocket fees at any time. When borrowing against life insurance, the interest rate can vary depending on the state. Check with your loan provider for the specific interest rate.

Q. How Long Will It Take To Receive My Living Benefit Loan?

A. Borrowing against your life insurance policy a very quick process. You can expect to receive your loan in as little as three weeks from the date of application.

Q. Can I (Or My Family) Ever Be Held Personally Liable For The Loan?

A. No, the loan is secured solely by the life insurance policy. There is no other collateral required.

Q. What If I Have Poor Credit?

A. Your credit score will not be checked. You will not be disqualified because of poor credit, lack of income or a previous bankruptcy.

Q. Do I Have To Pay Taxes On The Loan Proceeds?

A. No, your loan proceeds are not taxable. However, please consult with your tax or legal adviser to verify.

Q: What Happens When The Enrollee Dies Before All Of The Long Term Care Benefit Is Paid Out?

A: Should an enrollee pass away with additional funds remaining in his or her benefit account, the remaining balance is paid directly to the enrollee’s named beneficiaries.

Q. How Do I Get Started?

A. Call Elderlife Financial Services at 1- 855-306-8516 to speak with a professional counselor or visit

About the Author

Roque Santi is the President and Chief Executive Officer of Elderlife Financial Services. Elderlife Financial Services is focused on providing financial solutions to seniors and their families as they transition into senior living. Prior to joining Elderlife in 2010, Mr. Santi was the President and Chief Financial Officer of ECC Capital Corporation and was part of ECC’s leadership team since 2004. He has more than 29 years of experience in the consumer finance and real estate industries.

Update: January 2018