Does Long Term Health Insurance Cover Assisted Living

Long-term care insurance is beneficial for costly care in old age. It safeguards estates from such expenses. AARP states that over 65, there’s a 50-50 chance of requiring long-term care, not covered by health insurance.

Not all seniors need nursing home care; many opt for assisted living. These facilities offer intermediate care between independence and nursing homes.

Assisted living costs around $4,300 monthly, excluding medical expenses. Long-term care insurance covers such costs, aiding seniors in accessing necessary care.

Does long term health insurance cover assisted living
Long-term care insurance covers assisted living for those struggling with daily tasks. It includes services not covered by Medicare, helping with costs. Purchasing this insurance helps plan for assisted living expenses: Image source (Forbes)

What is Long Term Care Insurance? 

LTC Insurance, or Long Term Care Insurance, serves as a financial safeguard for individuals aged 65 and above who face disabling or chronic conditions, assisting them in managing the expenses associated with senior care.

This coverage facilitates access to various forms of care such as assisted living, in-home assistance, nursing home stays, home health services, or adult daycare.

Specifics of coverage vary among LTC policies, typically including limitations on maximum benefit amounts.

How Does Long Term Care Insurance Work

Long-term care insurance is crucial for financial planning, often sought between ages 50 and early 60s to lower costs and avoid higher rejection rates.

To apply, compare policies based on needs and costs, complete straightforward paperwork, and provide health information.

Upon approval, pay premiums to become eligible for benefits when unable to perform two of six daily activities or suffer cognitive impairment.

Once eligible, coverage typically starts with a daily limit until reaching the lifetime maximum.

Some policies may have an “elimination period” requiring out-of-pocket payments before reimbursement for care.

Types of Long Term Care Insurance 

Generally, long-term care insurance falls into one of two categories: traditional long-term care insurance and hybrid life and long-term care insurance, which is a blend of the two types of policies. Here are how these types of long-term care insurance work.

Traditional Long Term Care Insurance 

A traditional long-term care insurance policy will cover long-term care needs, including assisted living, nursing home care, or home care, paying out as much as $3,000 to $5,000 a month over a set period, usually about three to five years.

Hybrid Life and Long Term Care Insurance 

Multiple insurance carriers have developed long-term care policies that include a life insurance benefit and have a cash value that will grow over time.

These policies are generally more expensive than traditional long-term care insurance.

Does Long Term Care Insurance Cover Assisted Living Facilities? 

Yes, long-term care insurance policies are intended to cover care in assisted living facilities if the insured has difficulty with typically at least two daily tasks or activities of daily living.

Long-term care policies usually cover assisted living and nursing home care. Long-term care may also pay for professional nursing care, occupational therapy, or rehabilitation for home care.

Help with tasks such as housekeeping or personal care may also be covered for those needing help in their own home – depending on the policy specifics. Some policies even cover respite care, adult day care, home health care, and hospice care.

However, don’t assume that every long-term care policy covers assisted living. While you can always double check with your insurance agent or financial advisor about long-term care coverage details, you should always make sure to read the long-term care policy details to confirm.

What Does Long-Term Care Insurance Cover? 

Most long-term care insurance policies are comprehensive, meaning that they will cover various senior care and custodial care costs.

Assisted Living 

Assisted living, which usually offers meals, cleaning, laundry, and some medical / nursing supervision, is covered by most long-term care policies. Some policies have a cap on benefits, meaning that they will only cover assisted living until the maximum benefit level has been reached.

Nursing Home 

Nursing home care, which can cost more than $8,000 a month, is covered by most long-term care policies.

These facilities include skilled nursing care 24 hours a day, a higher level of care than assisted living.

Nursing homes can also include physical therapy as well as memory care for those with cognitive declines which are typically included with long-term care coverage.

In-Home Care

Many people want to live in their own homes for as long as possible. Long-term care insurance can help by paying for at-home medical expenses like nursing care, occupational therapy, rehabilitation, and even help with cooking, cleaning, and personal care.

Hospice Care

Though some insurance providers may cover short-term hospice stays, most providers do not cover hospice care. However, hospice care is often covered by Medicare for people with a life expectancy of six months or less.

What Does Long-Term Care Insurance Not Cover? 

While most long-term care policies cover a variety of care costs, they don’t cover everything. Among costs not covered by long term care insurance are these:

Pre-existing Health Conditions  

Many insurance companies will sell long-term care insurance to customers with pre-existing conditions or health issues, but they may not cover claims or medical costs related to those health conditions for six months or more.

Mental Health and Nervous Disorders  

Some long-term care insurance policies exclude mental health, anxiety, and nervous disorders, which can be common in seniors needing long-term care.

Care Provided by Family Members  

Adult children and other family members often are caregivers for older family members, but their care will not be paid for by long-term care insurance. If grown children care for a parent, they will not receive payment for that care.

Treatment Outside the U.S. 

Many Americans retire abroad, but not all LTC insurance will cover care outside the U.S. Policies that do cover care abroad may place coverage limits.

Who Might Not Qualify for Long-Term Care 

Not everyone who applies for long-term care insurance will qualify. There is no age qualification, although purchasing long-term care insurance later in life can be prohibitively expensive. Applicants must be in good health, and those who need long-term care already will be denied.

Average Long-Term Care Insurance Costs 

Costs of long-term care insurance can vary widely since pricing depends on age and health.

A healthy 55-year-old man can pay an annual cost of about $1,700 a year for long-term care insurance (monthly premium of about $142).

However, the annual cost of long-term care – more than $96,000 a year for a bed in a nursing home, on average – far outpaces the costs of long-term care insurance.

Read more: Is health insurance legit?

How to Choose a Long Term Care Insurance Plan 

Look for comprehensive long-term care insurance plans. They cover a wide range of costs.

Check the monthly premiums, but also understand the coverage.

Daily benefit varies among plans.

Some plans have limits on coverage duration, usually 3-5 years.

Watch out for waiting periods before benefits start.

Stick with traditional policies if you don’t need life benefits and cash value.

Consider hybrid policies if you want life insurance with long-term care.

Discuss with a financial planner for personalized advice.

The best policies cover various costs like assisted living and therapy.


As you consider long-term care insurance, these frequently asked questions may come up.

Can You Use Long-Term Care Insurance Internationally? 

Many long-term care insurance policies do not cover the costs of care abroad or limit what is covered, which can concern those planning to retire outside the U.S.

Who Doesn’t Qualify for Long-Term Care Insurance? 

You should purchase long-term care insurance before it’s needed. If you wait until you have a  serious medical condition or cognitive struggles, you may no longer be eligible for long-term care insurance. You or your family will face the cost of long-term care services. Often this means spending life savings until you qualify for Medicaid.

How are Long Term Care Rates Determined? 

Just as younger and healthier people pay less for life insurance, they will also pay less for long-term care insurance since they are less at risk for needing long-term care. Costs of long-term care insurance rise with age and infirmity.

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