There is an insurance component to the entry fee and the monthly fees. Your community's actuarial report evaluates the health and longivity of members of the community and the reserves available for their care and renders an opinion on actuarial soundness. In plan language, they are assessing how likely it is that the reserves are sufficient to fulfill the obligation to all of the present day residents.
One of the ways communities get into financial trouble is to spend down reserves and count on future resident's fees and deposits to meet obligations to present day residents.
AV Powell is an actuarial consultant who explained how all this works to Pennswood Residents. Check out his presentation here: Read More/Watch >>
Richmond Shreve
Board Member
Forum Moderator