A Question About Life Insurance, Final Expense, Mortgage Insurance, Reverse Mortgage, and Social Security During Hospice Care

Reverse Mortgage or List it?

Here’s a question posed by a member in one of my Facebook Groups I belong to that I’d like to share. It is a “real-world” situation that many people find themselves in simply because they, quite unfortunately, didn’t have life insurance in place at a younger, healthier, age. Here’s the situation:

Hospice Care, Life Insurance & Final Expense Question: 

“My grandpa just got put on in-home hospice due to terminal cancer. He maybe has a month or two if we’re LUCKY. He is a Vietnam vet, and they have a house but do not own it outright. Is there any sort of life insurance he could get or any insurance at all to help my grandma after his death with living expenses?”

Possible Reverse Mortgage Solution:

Unfortunately, there were some in the group who suggested a reverse mortgage solution for the grandmother.

Those who know me, also know that I am also a Licensed Real Estate Broker in the state of Massachusetts in addition to being a Licensed Insurance Broker. Please, please, please, think twice before considering a Reverse Mortgage. There are so many loopholes, and agreements. The owner can lose the house regardless. I had one client who did this, and her equity was being whittled away much sooner than she had ever anticipated. Her “attorney” was supposed to look out for her. He didn’t. The Government approval process with the HUD-assigned representative was supposed to look out for her, she didn’t. My client was eventually threatened with foreclosure because they didn’t like the repairs she was required to do “in the agreement,” so they sent her a pre-foreclosure letter. I quickly listed her house and got her out of her Reverse Mortgage situation just in time with approx. 20K in equity left…. Please think twice before doing a Reverse Mortgage. The underlying bank has absolutely NO PROBLEM foreclosing on a widowed woman trying to keep a roof over her head.

Life Insurance Or Mortgage Protection Insurance:

It is unfortunate that they waited too long before looking into Life Insurance. A Whole Life Insurance policy with Living Benefits would have been very helpful in this situation. Even if they had purchased Mortgage Protection Insurance when they mortgaged the home would have helped. It would have paid off the home for her had it been in place prior. From what I understand, as well as those who have more insurance product knowledge than me, suggests that there would be problems getting any Life Insurance coverage within such a short time frame.

As a Real Estate Broker in Massachusetts, and from the short sales I have done, I would definitely NOT go the route of a reverse mortgage. There are soooo many shady people out there, I would advise against it unless she had a well-trusted attorney (one who had nothing whatsoever to do with the Rev. Mortg. co.) who would watch over the transaction – double-check it, triple-check it, and then quadruple-check it. I can tell you, I’ve dealt with reverse mortgage clients who would have lost everything had it not been for me successfully selling their home before all equity was siphoned away by the Reverse Mortgage company.

Fixed Income Annuities & Social Security Benefits:

Please think twice before even considering a Reverse Mortgage. My advice is for her would be to list the home – especially if there’s a good bit of equity left over what’s owed. She could then buy something smaller, even a small condo as it would save her from exterior maintenance. She may also consider moving to a state with a lower cost of living, and invest whatever she has left over into a Fixed Income Annuity that would provide her with additional monthly income. Further, if she was married for over 10 years and he was the top earner in the family over the years, and she is claiming or already receiving Social Security under his name, she will receive additional benefits once he passes.

Bottom Line – Buy Life Insurance!

So, for those who are considering buying life insurance, but haven’t yet, please consider doing so as soon as possible. The younger and healthier you are, the cheaper it is – not to mention you would also be building wealth if it’s a Whole Life Policy. If I had known “then” what I know “now,” I would have purchased my policy a long, long while ago.

I hope this scenario helps to convince those who are on the fence about purchasing life insurance. It is a real-world scenario, and it can happen to you, your loved ones, or someone you know.

God Bless,


Toni Nicholas – Currently (06-19-2023) Licensed in MA, MI and FL for Life Insurance and Fixed Income Annuities