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Life Care Versus Rental Senior Living Communities

Mar 30, 2022 | Additional Resources, Senior Living

There are a number of important factors to consider when comparing rental retirement communities to Life Care Communities. 

On the surface, the two options look quite similar, and some of the main differences may not be obvious at first glance. A Life Care Community is a Life Plan Community offering a Type A care contract. They place a stronger emphasis on preparing oneself financially for future care needs than rental retirement communities.

Keep reading to learn more about the difference between Life Care Communities and rental senior living communities.

Life Care Communities

The predominant feature of a Life Care Community is the Type A contract and its inherent financial protections. Here’s how it works:

  • Your one-time entrance fee and monthly fee ensure you have practically everything you need for a worry-free retirement. 
  • You must move to the community while you’re healthy and independent. Then, if you ever need care, including assisted living, memory support, skilled nursing or rehabilitation, your monthly rates remain predictable and stable. 

While there’s a perception that the entrance fee makes a Life Care Community more expensive, the fact is, over time Life Care can become a nest egg-saving value with these financial advantages:

  • You’re protected against the ever-rising costs of long-term care.
  • A portion of your entrance fee will be refundable to you or your estate if you leave the community. 
  • Life Care offers tax advantages, as a portion of the entrance fee may be deductible as a prepaid medical expense. Consult with your tax advisor for details.

A Life Care Community usually offers apartment-like residences but may also offer freestanding cottages, villas or townhomes. The range of options for floor plans and square footage in Life Care Communities is, therefore, generally more comprehensive.

A Life Care Community may offer multiple senior living options. This generally includes independent living, assisted living, skilled nursing care, rehabilitation services and 24-hour nursing care on site, which is different from what’s offered at a rental model community. In general, Life Care Communities also provide a greater variety of services and amenities than retirement communities that offer a rental structure.

Senior Living Rental Communities

In contrast to the Life Care contract, a rental community requires no entrance fee, though there may be a modest security deposit or community fee. As the name suggests, a rental community requires monthly payments in exchange for a residence and access to amenities.

In a rental retirement community, older adults live in apartment-style homes and are typically independent with little or no assistance.

While most rental retirement communities offer some form of support to their residents, most offer only basic support. When needed, daily assistance has traditionally been provided in a resident’s apartment. A third-party provider of these services is typically contracted either through the community or by the individual resident. In addition, seniors who choose to live in a rental community with care services will be required to pay market rates for these services. In cases where the community doesn’t provide the level of service that fits the needs of the residents, they may be asked to relocate to another community.

Residents don’t have to engage in long-term financial commitments with a rental retirement community. There is comparatively little financial risk for residents to leave the community if they choose to. Another factor to consider is that, just like in Life Care, the community has the right to request that residents leave if community codes of conduct have been ignored or the resident’s contract agreement is broken. The resident may have certain care or financial needs that the community cannot meet adequately and safely. These are a few other reasons why a resident may be asked to leave. 

How The Terraces at Bonita Springs Helps You Live Your Best Life

Rental retirement communities and Life Care Communities are very different from one another. It’s advisable to learn as much as possible about these two senior living options so you can make an informed decision. 

The Terraces at Bonita Springs is an elegant, energetic Life Plan Community where you can build your future safely. Visit us in person to get a feel for the best of senior living in Southwest Florida!