Senior friends sitting in the garden on a summer day together.

Life Care vs. Rental Communities: What Seniors Should Know

As you plan for your retirement, selecting the place you want to spend your golden years will be one of the most important decisions you make. Many older adults find themselves evaluating the option of whether or not to move to a Life Care community or a rental senior living community. While these choices may appear similar at first, which you choose will depend on several factors, including your financial situation and lifestyle preferences. Here’s what seniors should know about Life Care and rental communities to help make this choice easier. 

What is Life Care?

Many seniors choose a Life Care community because they want to ensure they have a plan in place for their long-term care needs. It’s estimated that 70% of seniors will require long-term health services, and in most cases, Medicare does not pay for long-term care. But at a Life Care community, you pay an entrance fee and predictable monthly fee throughout your stay, and in return receive guaranteed access to higher levels of care. For example, if you move into the community as an independent living resident but later require a higher level of care, you will have already chosen where you will receive your care and how it will be covered.   

What is a Rental Community?

A rental community is a month-to-month senior living option. You pay a monthly fee subject to market rates for access to housing and any amenities and services included. While these communities don’t typically charge an entrance fee, if your care needs change, so will the amount you pay each month. These costs can increase rapidly. In 2022 alone, healthcare costs rose 14.5%.  

Rental communities make it more difficult to plan for your future finance needs, as you will not have a good idea of what you will pay for care in the future. For instance, if you need additional healthcare services that aren’t offered on-site (skilled nursing care, memory care, assisted living or rehabilitation) you will need to leave the community and pay unpredictable market rates for those services. 

While some healthcare services may be provided on-site, those costs will be on top of your monthly rental fee, and they will be at the current market rate. Because we cannot know the future costs of care, this makes it difficult to plan ahead. As is the norm with most rental agreements, a resident is not tied to a long-term commitment. Residents can leave without penalty. However, a 30- to 60-day notification to the landlord or community manager may be required. 

Rental vs. Life Care

In summary, while a rental community may position itself as a lower cost option, the long-term costs can be substantial if your healthcare needs change. Here is a breakdown of the key differences between these two options.

Rental Community

  • No entrance fee
  • Unpredictable monthly rental fee if care needs change
  • Market rate charge for additional levels of care, if needed

Life Care Community 

  • One-time entrance fee that may be partially refundable
  • Predictable monthly fee that includes housing, services and amenities and won’t change based on the need for additional care
  • Lifetime priority access to additional levels of on-site care
  • Significant savings compared to open market rates

Why Many Seniors Choose Life Care Over Rental Communities

While the initial financial investment in a rental community is less than at a Life Care community, many seniors prefer the long-term stability that Life Care offers. As healthcare costs continue to rise, it can be prudent to plan now for these future needs as opposed to worrying about long-term care in the future. 

Life Care communities also tend to have a more robust range of resort-style amenities and services. They can also give a feeling of more stability, as these communities draw those seeking a long-term living experience. Residents reside here much longer than at rental communities, which helps to encourage a closer, more neighborly atmosphere.   

Explore Senior Living Options at Abbey Delray

At Abbey Delray, every day is an opportunity to engage one’s passions. Residents enjoy comfortable, private apartments, chef-prepared meals and premium services and amenities, as well as priority access to our suite of on-site health services. When it comes to selecting the perfect place to foster your mental, emotional and physical well-being, there really is no better place than Abbey Delray. 

Contact us to learn more about our community, or to schedule a tour and see it for yourself.