The other two most common products for seniors are an equity share, or an appreciation advance.
Both accomplish the major goal of a senior product, generating cash without payments, with little or no qualifying. Each of these generates a lump sum of cash, not ongoing income, but can be "turned into" cash flow in a couple of ways.
First, if there is a mortgage that needs to be paid off, paying off that mortgage will allow cash flow that was previously "earmarked" for that payment to be brought back into the budget. This frees the money to be spent on something else. Both the equity share and appreciation advance allow for mortgages to be present (with some restrictions), so a mortgage payoff is not generally required as part of the transaction.
Second, the money generated by these programs can be parked in a CD or other safe investment and the interest that is generated can be used for cash flow. At today's rates, that is not going to be a substantial amount, but it is a possibility.
Third the "principal" can be invaded, for as long as it lasts.
Finally, the money can be invested (with extreme caution) into an annuity or other investment vehicle. I am not a huge fan of annuities due to the complexities of these instruments. There are options and protections that can, and often should be, added to these insurance products. Each of these protections can add costs, or reduce income, so making the choices can be difficult. In addition, agents can make huge commissions on these products and so may be tempted to sell them in situations where other investments may be more appropriate.
We'll get into more details regarding these reverse mortgage alternatives in another post, or feel free to contact me if you need information right away.
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July 31st, 2008 
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