DEFINITION of 'Entrance Fee'
A term that can refer to any charge for admission. However, it is commonly used in reference to continuing-care retirement communities (CCRCs). Rather than purchase a unit in a CCRC, residents typically pay a high entrance fee and monthly payments. The entrance fee is paid in exchange for services provided at the CCRC, such as nursing care throughout the lifetime of the resident.
BREAKING DOWN 'Entrance Fee'
In terms of investment, the longer you live the more services you use up and, therefore, you make better use of the entrance fee. There are many financial, legal and medical issues to consider when choosing a CCRC. It is recommended that residents, their families and/or professional advisors research a prospective CCRC thoroughly before the entrance fee commitment is made.