Life Assurances in Assisted Living Management Bring Peace of Mind….

PIC - ME AT DESK 1 10-09

Now that I think about it, the year was 1997.  My next door neighbor was the late John Dickerson, a retired police lieutenant and 3rd Degree Mason from the City of Detroit.  He lived at 6013 Artesian near Ford Road in Detroit, Michigan and mom and I lived at 6021.  He told me he lived alone and that his wife was up north in a Masonic Senior Care facility.

One of his expressions stuck with me.  He said, “Its expensive, but when I run out of money she can still stay.”  That was intriguing to me.  What he was referring to was the deposit paid at admission.  While the assets remain in place, you do pay the monthly fee for care, whatever is agreed upon by both parties.  However, when those cash assets are gone, your care continues.  How is that possible?


The process works like this.  Irma moves in as a result of her dementia and her husband’s inability to care for her at home.  Your facility has a memory care unit and your charges are $180.00 per day for her care, ($5400.00 per month) and her husband commits to pay that until the $300,000.00 he has in cash assets runs out.  After that, Irma’s combined monthly income, which includes her social security and her pension which is $3130.00 per month must now suffice for the same level of care.  The deposit paid at admission ensures that.  These deposits range from $50,000.00 to $100,000.00 or more depending upon individual budgets/assets/ diagnosis, life expectancy, etc.

Does it mean the facility accepts a loss?  Not necessarily.  For example let’s say that in a 40-bed facility, our expenses average $50,000.00 to $55,000.00 per month.  You are only at about $1400.00 per month, per resident in expenses.  Accordingly, well after your resident cannot afford what may be the acceptable market rate for your services, you can still afford to care for this person.  Even advanced needs requiring a few more hours of personal attention per day would not take you much higher than several hundred dollars more for this person.  Let’s take a look at a sample breakdown that may better explain the process:

Sample Expense Chart – 40-Bed Assisted Living

Monthly Expenses Divided Among 40 Residents
$4800.00 – Debt Service

$9105.00 – Direct care staff and payroll tax match

$6000.00 – Administrator

$6000.00 – Program Nurse

$8000.00 – Food

$5000.00 – Kitchen Personnel

$3000.00 – Various insurances

$5000.00 – Transportation and miscellaneous

$1000.00 – Linens and general supplies

$2000.00 – Communications/electronics

$4000.00 – Utilities


Total Monthly Expenses:


$1347.63 Per Resident

These deposits are governed by legitimate refund agreements, although with many deposits refunds do not come into play.  After all, the facility agrees to accept a risk which affords the resident and their designated representative true peace of mind.    Risk elimination comes with a cost.

Assisted living has grown in clinical competence and positive outcomes for those with dementia and other types of medical fragility.  Most still believe the care brings more dignity than most skilled nursing environments.

Thanks for allowing us to share.  Sign-in and share your thoughts.


PIC - DCTC LOGO PROJECT MGTAnother Blog Post provided by Direct Care Training & Resource Center, Inc. and its affiliates.  Photos and other images used are for the sole purpose of complementing written material and are not designed to imply or suggest an affiliation with or support by any individual or organization.



PIC - BRUCE CORPORATE FACE SHOT 2009Bruce Wayne McCollum is a long-term care operational and systems development consultant with a focus on care delivery programs for adults and children.  He works with clients throughout North America, Australia, Africa and Europe.  His organization operates online schools for providers of care to adults and children.  School for Providers of Care to Adults School for Providers of Care to Children.



pic-linkedin-small-scale-asst-living-success-room-image-jpgFor More on our commitment to the success of assisted living and other community based care providers, please join the LinkedIn Group:  Small Scale Assisted Living Success Strategies.