Life Plan vs. Rental: Learn the Difference

If you’re just starting to research senior living communities, you’ve probably found there are a wide range of terms like Life Plan Community and rental community offering a variety of lifestyle and prices. But how do you know which one will best fit your current lifestyle and give you a smart plan for the future, including health care? To help you make a more informed decision, this post will compare life plan vs. rental communities and cover the pros and cons of each.

Life Plan Communities

Life plan communities are a great way to continue your active and independent life plus their maintenance-free lifestyle gives you more time to pursue your goals. Plus their continuum of care provides you with a solid plan for the future. When most seniors compare life plan vs. rental communities, it’s the life plan entrance fee that gets most of the attention. But once you understand the purpose of an entrance fee, you’ll be able to figure out if it’s an option that’ll work for you and your budget.

Pros

• Features a full continuum of care including independent living, assisted living, memory care, skilled nursing and rehabilitation
• Offers a variety of housing styles including floor plans and square footage options.
• Provides a range of services and amenities — including housekeeping, maintenance, dining, fitness and art classes, social events and outings — that are covered by the monthly fee.
• Health care center is regulated and inspected on a regular basis.
• Part of your entrance fee and monthly fee may be tax deductible as prepaid health care costs. Consult with your accountant or financial advisor before deciding.

Cons

• Having to pay an entrance fee. Although it can be used for capital improvements and to offset the cost of resident’s health services.

Life Plan Communities Offering LifeCare®

All communities that offer LifeCare — like Sagewood — are also Life Plan Communities. But not all Life Plan Communities offer a LifeCare contract option. While a life plan community provides you with care, the amount of days and the cost can vary depending on your contract type. With a LifeCare contract you have unlimited days of health services — including assisted living, memory care, skilled nursing and rehabilitation — with only a slight increase in your monthly service fee.

At Sagewood, if you leave our community for any reason, our Return-of-Capital® Plan refunds 80% of your entrance fee. We also offer a 100% Satisfaction Guarantee. If you aren’t completely satisfied with Sagewood and choose to move out within your first four months, we’ll refund 100% of your entrance fee. 

Rental Communities

Rental retirement communities work best if you are able to live on their own, without the need for higher levels of care. When comparing life plan vs. rental communities, one of the features that stands out most is the rental option doesn’t require an upfront fee. Like a Life Plan Community, your monthly fee is determined by the size of your residence and the level of care you need.

Pros

• No up-front entrance fee.
• No long-term commitment and you can leave at any time.
• You pay only for the health care you need.
• Greater control of our finances.

Cons

• Limited services and amenities.
• Depending on the community, you may have to pay à la carte fees for certain services and amenities like housekeeping and dining.

• The rental community isn’t contractual obligated to provide additional care. 
• If health services are provided by the community, you’re not guaranteed access.
• If you need a higher level of care that your rental community doesn’t offer, you may have to move during a medical emergency.
• You’ll have to pay market rates for whatever care you receive in addition to your monthly rent. 
• Your monthly fees are probably not tax deductible. Again check with your accountant or financial advisor. 

Will You Need Care in the Future?

As you weigh your options, the biggest factor is whether or not you think you’ll need care in the future. But before you decide, consider this — the U.S. Department of Health and Human Services reports that 70% of seniors 65 and older will need some type of long-term care — with an average stay of approximately 3 years. And even if you don’t need care, what about your spouse? According to the latest Genworth Cost of Care Survey, the national average for assisted living is $4,051/month with skilled nursing costing $8,517/month. 

Explore Your Senior Living Community Options

If you’re ready to learn more about the financial security Sagewood offers you and your family along with our engaging, amenity-rich lifestyle, contact us here. One of our senior living residency counselors would be happy to discuss your options with you.