Does Long-Term Care Insurance Cover Assisted Living?

Long-term care insurance can help pay for eligible care services in assisted living, up to the daily or monthly benefit amount selected under the policy. Once the policyholder meets the policy’s benefit triggers and any elimination period, the insurer reimburses covered expenses according to the policy terms.

That said, coverage may not be enough to pay for every expense. The national average monthly cost of assisted living is $5,830, according to A Place for Mom’s proprietary data.^[01] A policy that pays $150 per day would provide about $4,500 per month, which means the gap will have to be paid from another source, such as Social Security payments, pension, or savings.

Many long-term care insurance policies cover services in:^[02]

• Assisted living communities
• Nursing homes
• Adult day care
• Memory care communities
• Hospice at home

Depending on where a senior receives long-term care services, their long-term care insurance policy may cover the following services:^[03]

• Help with activities of daily living (ADLs)
• Skilled nursing care
• Speech, physical, occupational, or rehabilitation therapy
• Nonmedical home care and homemaker services

Long-term care insurance policies may have limitations and exclusions, meaning they might not cover services in certain situations, including:^[04]

• Certain mental or nervous disorders; some states prohibit policies from excluding coverage based on Alzheimer’s disease or certain other forms of dementia
• Alcoholism or drug addiction
• Intentionally self-inflicted injuries
• Care in government nursing facilities unless you’re required to pay for the care

Read more:Using Life Insurance to Pay for Long-Term Care: Tips for Seniors to Free Up Cash

Can you afford assisted living?

When does long-term care insurance start paying for assisted living?

Long-term care insurance generally begins paying for assisted living after the policyholder meets the policy’s benefit triggers and completes any required elimination period.^[05]

Benefit triggers are the conditions that must be met before benefits become available. Many policies require that the policyholder need help with at least two ADLs or have a qualifying cognitive impairment.

The elimination period is the amount of time the policyholder must pay for eligible care before benefits begin. Depending on the policy, the elimination period may be 30, 60, or 90 days.

Long-term care insurance policies vary, so it’s a good idea to review the policy rather than assuming it will cover assisted living. Key details to check include:

• Covered settings. Confirm that assisted living is an eligible setting under the policy.
• Covered services. Review which care services qualify for reimbursement.
• Benefit triggers. Check what care needs or cognitive conditions must be met before benefits begin.
• Elimination period. Determine how long the policyholder must pay for care before benefits start.
• Benefit amount. Find the daily or monthly maximum the policy will pay.
• Benefit period or maximum benefit. Check how long benefits may last or whether the policy has a lifetime payment limit.
• Reimbursement process. Find out whether benefits will be paid to the policyholder, another designated recipient, or directly to the assisted living community.
• Exclusions. Understand the services and circumstances the policy doesn’t cover.
• Claim requirements. Confirm which assessments, care plans, invoices, or other documents the insurer requires.

Expert advice for affordable assisted living

The insurer can explain its specific claim requirements, but a representative from a residential setting such as skilled nursing, assisted living, or memory care, may be able to help you with the initial documentation needed for submitting a claim, says Niki Gewirtz, a senior care expert with A Place for Mom. This could include:

• A copy of the facility license
• The resident’s care plan
• Documentation from a physician
• Insurer forms that describe the care provided and the community’s staffing

“Each month someone at the facility, such as the business office manager or the executive director, will fax a copy of the previous month’s rent/care statement along with a form that will state how many days of the previous month that resident was in the community,” says Gewirtz.

Payment timing and reimbursement methods vary by policy. “Most insurance claims are paid after the month is over,” says Gewirtz. “The resident would be paid for the previous month once the month has ended. Payment typically goes directly to the resident/senior.”

It’s always a good idea to direct questions about claims processing and payment timing to your insurance representative, says Gewirtz. “That way it is clear what is needed and what to expect.”

If premiums are too expensive, or long-term care insurance won’t cover costs for needed services, other ways to pay for assisted living include:

• Selling or surrendering a life insurance policy
• Applying for a bridge loan
• Using a reverse mortgage
• Renting or selling their home
• Taking advantage of VA benefits
• Qualifying for Medicaid in a state that covers assisted living

A Place for Mom’s Senior Living Advisors can help you compare assisted living options based on your loved one’s care needs, preferences, and budget. They can provide personalized community recommendations, help coordinate tours, and support you through the logistics of the move, all at no cost to your family.

For questions about insurance coverage, policy terms, legal issues, or taxes, consult the appropriate licensed professional.