In Finance, what is an Entrance Fee?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 24 February 2020
  • Copyright Protected:
    Conjecture Corporation
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Entrance fees are fees or charges that are incurred as the price for admission. The term is used in a number of business settings, including the process of moving into a planned community, such as a retirement village. In many cases, the entrance fee also helps to pay for services that will be rendered for the entire time that the individual chooses to remain within the community.

As it relates to a continuing-care retirement village or community, the entrance fee normally covers expenses like nursing assistance and general health support from the community itself. Many communities of this type will specify the type of medical support that is covered by the fee. One example would be a nurse who provided ongoing first aid to the residents of the community, or who visited each resident a specific number of times per week to check blood pressure, or to see that the resident is taking his or her medication according to instructions.


In most cases, the entrance fee is one of the larger expenses associated with moving into a continuing-care facility. While the lump sum may seem a bit intimidating, it is important to realize that the longer the resident remains in the retirement community, the more benefit he or she receives from that large fee. This means that if the retiree is in excellent health and can reasonably expect to live another twenty years, the high fee will be well worth the amount, assuming the quality of care is up to standards. At the same time, if the resident is not anticipated to live for more than a few years, looking for other types of care facilities that offer ongoing medical care without an entrance fee may be a good idea.

Paying an entrance fee does not necessarily mean that no other fees or charges will be assessed at a later date. With retirement planning, many facilities also charge a monthly fee related to the upkeep of the grounds and the extension of other services that are not covered under terms of the entrance fees. This is in addition to any type of monthly rental fee for an apartment or condominium that remains the property of the community. For this reason, it is important to look closely at what is and is not covered by this initial fee, as well as determining what type of recurring fees and charges will occur during the period of residency.



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