How to Pay for Memory Care: Financial Options for Families

By the Arbors Memory Care Care Team  |  Reviewed by Jenni Bost, Radiant Senior Living  |  Published:   |  Last Updated: October 20, 2026

Most families pay for memory care through a combination of private savings, long-term care insurance, VA Aid and Attendance benefits (for eligible veterans and surviving spouses), life insurance with accelerated death benefits, and home equity. The financial options for memory care vary based on a family’s savings, insurance coverage, military service history, and assets.

The best time to start planning is before a placement decision is required. A care coordinator can help families understand which options are available for their specific situation.

How to pay for memory care is one of the first questions families ask once they realize a higher level of care is needed. The cost is real, the options are not always obvious, and the decisions carry long-term financial weight.

This guide explains the main payment sources, who qualifies for each, and what families should consider before committing to a funding approach.

How to Pay for Memory Care: An Overview of Your Financial Options

The financial options for memory care fall into five main categories, each with different eligibility requirements and benefit amounts. Most families use a combination of sources rather than relying on one alone. The table below summarizes each option:

Private pay: the most common starting point

Most families begin paying for memory care through private funds. This includes personal savings, retirement accounts, Social Security income, pension income, proceeds from the sale of a home, and investments.

Private pay gives families the most flexibility in choosing a community and does not require approval processes or eligibility determinations. The primary consideration is how long private funds will last at the current monthly rate and whether a transition to another funding source needs to be planned in advance.

Starting the financial planning conversation early, ideally before a placement, is urgent, giving families more time to organize assets, review insurance policies, and explore other options.

Long-term care insurance

Long-term care insurance policies can provide a significant source of funding for memory care if the resident purchased a policy before a dementia diagnosis was made. Policies vary widely in benefit amounts, daily or monthly maximums, benefit periods, inflation protection, and the conditions that trigger payments.

Before assuming a policy will cover memory care, families should review the specific policy language carefully. Key questions to ask include:

• What is the daily or monthly benefit maximum?
• What is the elimination period, meaning how many days of paid care must occur before benefits begin?
• Does the policy cover residential memory care specifically, or only skilled nursing care?
• Is there an inflation protection rider that has increased the benefit amount over time?

If a policy exists, but it is unclear whether it applies to memory care, contact the insurance carrier directly with the name and type of care community being considered. A licensed insurance advisor can also review the policy on a family’s behalf.

VA benefits for memory care: the Aid and Attendance pension

VA benefits for memory care include the Aid and Attendance pension, a benefit enhancement that helps eligible veterans and surviving spouses cover the cost of care when they require assistance with daily activities such as bathing, dressing, and medication management.

To qualify, a veteran must meet specific military service requirements, financial eligibility thresholds, and a medical need criterion. A physician’s statement confirming the need for assistance with activities of daily living is part of the application.

The Aid and Attendance benefit can be applied toward memory care costs. Because the application process takes several months, families should begin as early as possible rather than waiting until placement is imminent.

A Veterans Service Organization (VSO) can assist with the application at no cost. Nevada has several VSOs available to veterans and their families in the Reno and Sparks area.

Life insurance with accelerated death benefits

Many life insurance policies include a provision called an accelerated death benefit, which allows the policyholder to receive a portion of the death benefit while still living if they meet a qualifying condition. Dementia is recognized as a qualifying chronic illness under many policy terms, which means life insurance for memory care costs is a funding option many families overlook.

If a life insurance policy with this provision exists, the policyholder or their authorized representative should contact the insurance carrier to request a chronic illness rider review. The process typically requires a physician’s certification of the diagnosis and a formal claim application.

Key questions to ask the insurance carrier:

• Does this policy include an accelerated death benefit or a chronic illness rider?
• Does the policy define dementia or Alzheimer’s disease as a qualifying chronic illness?
• What percentage of the death benefit can be accelerated, and is it paid as a lump sum or in installments?
• Are there tax implications to receiving an accelerated benefit?

A financial advisor or elder law attorney familiar with insurance products can help families evaluate whether this option is available and how it interacts with other funding sources.

Using home equity to pay for memory care

If the person moving into memory care owns a home, home equity to pay for memory care is often available through one of three approaches. Real estate is frequently the largest asset a family can draw on to fund care.

Selling the home

Selling the property outright is the most straightforward approach. Proceeds become available once the transaction closes and can be applied directly toward memory care costs. This is the most common approach when neither spouse remains in the home.

Home equity line of credit (HELOC)

A HELOC allows a homeowner to borrow against the equity in the property without selling it. This can serve as a bridge between when care begins and when other funding, such as a VA benefit approval or proceeds from a pending home sale, becomes available. Interest accrues on the amount drawn, so this is most effective as a short-term measure.

Reverse mortgage

If a spouse or qualified co-borrower remains in the home, a reverse mortgage may allow the household to access equity as income without selling. Eligibility requires the borrower to be at least 62 years old and to meet HUD counseling requirements. A HUD-approved housing counselor can walk families through the terms and eligibility conditions before any commitment is made.

Home equity decisions involve significant financial and legal considerations. Families should work with a financial advisor or estate attorney before committing to any of these approaches.

Bridge financing and other short-term options

Some families face a gap between when memory care begins and when other funding becomes available. Common examples include waiting for a home sale to close or waiting for a VA benefit to be approved.

Senior care bridge loans, like those offered by Elderlife Financial Services, and other short-term financing products exist to cover this gap. These are not long-term solutions and carry interest costs, but they allow families to begin care without delay while permanent funding is arranged. A senior care financial advisor or the community’s own care coordinator can help identify appropriate bridge options for a specific situation.

How to start the financial planning conversation

The most useful thing families can do is start the conversation before a placement decision is required. When decisions are made under pressure, options narrow.

A practical starting sequence:

• Review all existing insurance policies, including long-term care insurance and life insurance policies for accelerated death benefit provisions
• Determine the current monthly income from all sources, including Social Security, pension, and investment income
• Estimate the value of assets that could fund care, including savings, investments, and real estate
• Contact a Veterans Service Organization if the veteran or surviving spouse has not yet explored Aid and Attendance
• Consult a financial advisor or estate attorney to review home equity options and overall funding strategy
• Talk to a care coordinator at the memory care communities being considered; many will meet with families before a decision is made

Planning ahead makes the financial side of memory care more manageable.

The team at Arbors Memory Care in Sparks, Nevada, is available to talk through what these options might look like for your family’s specific situation. Contact us to schedule your tour.

Frequently asked questions about paying for memory care

Can you use a loved one’s Social Security income to pay for memory care?

Yes. Social Security income can be applied toward memory care costs as part of a private pay approach. Many families combine Social Security income with other funding sources to cover the monthly cost of care.

What happens if private funds run low?

Families who anticipate that private funds may not cover the full duration of care should begin exploring other options early rather than waiting until funds are nearly exhausted. A financial advisor or elder law attorney can help identify which additional sources may be available based on the family’s specific asset and income profile. Speaking with the care community’s coordinator early also gives families more time and options.

Is a power of attorney required to manage payments for memory care?

A durable financial power of attorney gives a designated family member the legal authority to manage financial accounts and make payments on behalf of the person with dementia. Without this document in place, families may face significant legal barriers to managing funds. If a power of attorney has not yet been established, consulting an attorney promptly is important.

Does the VA Aid and Attendance benefit apply to surviving spouses who are not veterans?

Yes. Surviving spouses of veterans who met service eligibility requirements may qualify for a reduced Aid and Attendance benefit. Eligibility and benefit amounts differ from those available to veterans directly. A Veterans Service Organization can confirm eligibility for a specific situation.

Can families visit Arbors to discuss financial options before making a decision?

Yes. Our team at Arbors Memory Care is available to meet with families to answer questions about the placement process, care options, and financial considerations. We welcome calls and visits before you are ready to make a decision. Schedule a visit here.