Eating Lobster in Retirement: How One Firm Helps Seniors Find a Way
Retirement planning is paramount for everyone and especially for families considering senior living options.
Life Care Funding CEO and company co-founder Chris Orestis is an expert in the field. Orestis comes from a family with a “big senior living and long-term care background” as he describes it. His family is the largest owner and operator of assisted living communities in Maine.
He recalls back in 2007 talking about the many seniors who had robust life insurance policies, but just let them fade away by not keeping up on payments. His solution was to found Life Care Funding, a firm that buys a life insurance policy from a senior and then aids them in setting up the money from the sale to use for assisted living costs.
For example, if a senior has a $100,000 life insurance policy, Life Care Funding might give them $60,000 for it and take over ownership of the policy. “It’s cashing in an asset at its present day value instead of waiting for the $100,000 to go to a beneficiary,” Orestis explains. “They are going to sign it over. We’ll own the policy, and they’re going to get the money today for it.”
That money is placed into a long-term care tax-free benefit account, which then makes monthly automatic payments to an assisted living community of choice.
Many families Orestis had talked to in the past had been making premium payments for decades and then seniors just drop them. Often the policies are canceled because “they are expensive and can be more than a car payment,” Orestis explained. “They begin to question why they’re spending $500 a month on premiums and drop it without realizing that it could be turned into a different kind of savings. It’s a lack of knowledge.” He noted that a number of states have introduced legislation to mandate that consumers get better disclosure on this feature of a life insurance policy.
The Life Care Funding program is offered in more than 6,000 senior living communities as a financing option, including through many ALFA members.
life care fundingOrestis and his firm are saying thanks this summer by offering a lobster bake via a random drawing in August for any of Life Care Funding’s senior living partners. The winner receives 100 Maine lobsters along with corn, potatoes, French fries and other fixings.
“We are excited to see Life Care Funding recognize the active and quality lifestyles that people enjoy in senior living communities,” said Jaclyn Allmon, VP of marketing and communication at ALFA.
Eating lobster in retirement doesn’t sound too shabby. Orestis offers some financial advice for anyone who aims to dine on lobsters in retirement. If you have life insurance, don’t let it go. It’s a vehicle that can provide monthly tax-free payments to any sort of care you want – memory care, assisted living, or home care. “As long as you use if for care. You can’t use it to go on a world cruise with your family,” he said.
If you’re young, look at long-term care insurance, he says.
“Really our goal in 2007 was to give seniors another means to afford to remain in private pay and choose the care they want,” he said. “We knew that millions of dollars of life insurance policies were being thrown away. We want people to know this option exists and we’ve helped hundreds move into senior living using this program. We don’t charge any fees. We just work with our registered partners.
The company is based in Portland, Maine with offices in New York and Los Angeles. In 2013, it was bought by Resource America, an investment management asset group.