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3 Basic Life Care Contracts

Apr 25, 2022

If senior living contracts are making you go cross-eyed, you are not alone. Resident agreements come in many different forms, and it is difficult to differentiate between them. On top of that, some senior living communities offer one contract type, and others have several to choose from.

“At Canterbury Woods Williamsville, you have options. Whether you are considering Life Care because your priority is financial predictability and peace of mind or you are more interested in our other options, we are here to help you decide what is best for you, your budget, and your future,” says Canterbury Woods Marketing Director, Lynda Marino.

Continue reading to learn the differences between three common CCRC contract types.

A Vibrant Life at a Continuing Care Retirement Community

Since all three contracts explained here are ones you’ll encounter when exploring Continuing Care Retirement Communities – also referred to as Life Plan Communities – you should first understand the benefits of this senior living option.

When you live independently at a CCRC, you will have the great fortune of designing a retirement beyond imagination! You will discover a wide range of activities and events to enrich your life and many services and amenities to provide you with ease and uplift.

With a CCRC, you will have access to comprehensive levels of care, often including assisted living, memory care, skilled nursing and rehabilitation. Throughout your life, you will receive the support and care that a community provides at whatever point you need it.

Paying for a Continuing Care Retirement Community

With all three types of CCRC contracts, you will need to consider two financial components:

  • Entrance fee. The entrance fee is paid up front, and the national average cost is around $300,000.
  • Monthly fee. Along with an entrance fee, you will also pay monthly fees. These will vary depending on the contract you choose.

Type A (Life Care)

Life Care contracts often have the highest entrance fees. Your monthly fee may also start at a higher rate than with the other two contract options, but they will stay relatively the same throughout your retirement because they are protected from market rate increases.

Regardless of the level of care you are receiving or the effects of inflation, your monthly fee will not significantly increase. This provides you with the security of knowing that the care you need in the future will not risk your financial situation.

Type A contracts are preferred by residents who want predictability in finances and the peace of mind that they will be able to afford – and receive – the care they may need in the future.

Type B (Modified)

Under a Type B contract, often your entrance fee and monthly fee are lower than with a Life Care contract. But instead of having unlimited access to a continuum of care with one stable monthly fee, you will have to pay a portion of costs associated with increased care in addition to your monthly fee.

There are a couple of ways this can look at a community. Sometimes services are offered at a discounted rate, for example, 25% off of skilled nursing services. Other times, they may give you an allotted number of “free days” where you can receive more advanced levels of health care without additional costs.

Type B contracts are attractive to residents who want to save money in the short-term but still want some financial assurance in the event that they need higher levels of care.

Type C (Fee for Service)

Type C is also known as a fee-for-service contract. These agreements often have lower entrance fees and monthly fees than the other two types of contracts. However, utilizing the available advanced care options will increase monthly payments. These service fees are also subject to potentially exorbitant market rate increases.

This contract can be appealing to those who don’t want to spend money up front for services they may not need. It does, however, provide less certainty to long-term financial planning.

Canterbury Woods Williamsville Is Charming, Scenic and Beautiful

At Canterbury Woods Williamsville, our goal is simple: provide seniors with the best possible living experience. We’re a Life Care Community offering a full continuum of care. This includes independent living, assisted living, memory care, skilled nursing and rehabilitation.

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