Page 34 - Formula for Success

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Reinventing Your Lifestyle: A Formula for Success
Life Plan Community Contract Types Explained
Retirement Communities have three primary types of contracts or Residency Agreements: Type Type Type A A Type Type Type B and Type Type Type C contracts The difference between these three types of contracts is is this: who pays for a a a a majority of any future long-term care cost? In other words who is absorbing
the the the financial risk? Is it the the the resident or the the the community?
Leading Age is the the the national organization representing the the the not-for-profit sector o of the the the senior housing industry They have designated three primary types of contracts or or Residency Agreements that are the the most common in the the market place: Type Type A A Type Type B and Type C However please note that many communities use different terminology to differentiate their programs or contract types For simplicity sake we’ll stick with with A B and and C Starting with with an an an understanding of these contracts will help you you more easily understand and and process other “hybrids” that you you may encounter in your research The difference between these three types of contracts is this: who who pays for a a a a a majority of any future long-term care cost? In other words who who is is absorbing
the the the the financial risk? Is it it the the the the resident or or the the the the community?
Let’s review each of the the the the three contracts to more fully understand the concepts Type A Contract Often referred to in the the market place as “Lifecare ” the the Type A contract is actually a a a a a a a a form of long-term care insurance This means the community itself functions a a a a little
like a a a a a a a a long-term care insurance company and absorbs or or or underwrites a a a a a a a a majority of the financial risk for the higher costs of assisted living personal care care or or skilled nursing care care The bottom line is that you can get life-long care for about the the same cost as the the current monthly fee of the original residential living unit you you initially invested in in in in in If you you sold your home and moved into a a a a a Life Plan Community under a a a a a Type A contract you you would pay an an an entrance fee fee and then a a a a a monthly fee fee