Reverse mortgages could be a long-term care option

Didier Malagies • January 10, 2024


Among the numerous issues that retirement preparation can present to those near the end of their careers, long-term care (LTC) provides an increasingly common discussion point. One potential product that could assist in paying for LTC and its insurance could be a reverse mortgage, according to personal finance publication Kiplinger.


LTC is already an expensive prospect and is projected to become a more common necessity as the U.S. population grows older in the coming years. Insurers currently offer few affordable options for those in the economic middle, according to Kiplinger.


“Admittedly, it’s easy to see that most people will require some sort of long-term care later in life,” writes retirement advisor Jerry Golden. “Figuring out specifically who will need it is the tricky part.”


This is where a reverse mortgage could become a viable option for certain retirees, he explained.

“[A couple I previously profiled] considered a Home Equity Conversion Mortgage (HECM), also called a reverse mortgage, which can provide: 1. Additional cash income to pay for things like LTC premiums or other costs, and 2. Additional liquidity later in life if you pay interest on your HECM,” he said.


This option helped the couple discover that their retirements could go further than they originally thought.

“You might […] find that your retirement plan can pay for more than it could just a few years ago,” Golden said, referencing their use of a HECM product.


Reverse mortgage professionals have seen LTC as a viable vehicle for spreading the word about the product for some time.


In the past, RMD has profiled industry professionals who obtained LTC certifications to further inform their clients about retirement options, which also helped expand the understanding of the retirement ecosystem and the benefit programs current retirees can access.


“[The class helped me to] have a better understanding of Medicaid, not just what it covers but the different qualifications,” said former industry professional Steven Sless in an interview with RMD in 2020. “We talked a lot about protecting assets to qualify for Medicaid, and what I learned was that Medicare and Medicaid do help to fund long-term care, but oftentimes that long-term care is in a nursing home.”



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