What Does Long-Term Care Insurance Cover?

Long-term care insurance covers a variety of comprehensive services like adult day care, assisted living facilities, nursing homes and even respite care. Find out how having the correct policy in place can reduce stress and protect your financial assets. Consider coverage limitations for informed decision-making and due diligence.

Eric Estevez, Independent Licensed Life Insurance Agent
  • Written by
    Eric Estevez

    Eric Estevez

    Owner of HLC Insurance Broker, LLC

    Eric Estevez is a duly licensed independent insurance broker and a former financial institution auditor with more than a decade of professional experience. He has specialized in federal, state and local compliance for both large and small businesses.

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  • Edited By
    Savannah Pittle
    Savannah Pittle, senior financial editor for RetireGuide

    Savannah Pittle

    Senior Financial Editor

    Savannah Pittle is a professional writer and content editor with over 16 years of professional experience across multiple industries. She has ghostwritten for entrepreneurs and industry leaders and been published in mediums such as The Huffington Post, Southern Living and Interior Appeal Magazine.

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  • Reviewed By
    Daniel J. Adams, MBA, CFP®, CLU®
    Daniel J. Adams, MBA, CFP®, CLU®, Certified Financial Planner™ Professional and Independent Insurance Agent

    Daniel J. Adams, MBA, CFP®, CLU®

    Certified Financial Planner™ Professional and Independent Insurance Agent

    Daniel J. Adams, the founder of CEG Life Insurance Services, boasts extensive expertise in life and health insurance products. His role as a Certified Financial Planner™ professional and independent insurance agent allows him to aid clients in establishing a solid financial future. Moreover, he takes on the responsibility of training new agents and offering guidance to other financial professionals.

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  • Published: October 23, 2023
  • Updated: October 25, 2023
  • 5 min read time
  • This page features 7 Cited Research Articles
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APA Estevez, E. (2023, October 25). What Does Long-Term Care Insurance Cover? RetireGuide.com. Retrieved May 22, 2024, from https://www.retireguide.com/long-term-care-insurance/coverage/

MLA Estevez, Eric. "What Does Long-Term Care Insurance Cover?" RetireGuide.com, 25 Oct 2023, https://www.retireguide.com/long-term-care-insurance/coverage/.

Chicago Estevez, Eric. "What Does Long-Term Care Insurance Cover?" RetireGuide.com. Last modified October 25, 2023. https://www.retireguide.com/long-term-care-insurance/coverage/.

Key Takeaways
  • Long-term care insurance typically covers home health care, respite care, adult day care centers, assisted living facilities, nursing homes, and Alzheimer’s special care facilities.
  • Coverage is not unlimited. Limitations of long-term care insurance include elimination periods and unlicensed care coverage.
  • Long-term care insurance does not provide coverage for all types of care.

What Long-Term Care Insurance Covers

Most long-term care policies are comprehensive in nature and cover a variety of services that many individuals cannot afford on their own. The main services covered are home health care, respite care, adult day care centers, assisted living facilities, nursing homes and Alzheimer’s special care facilities. There are also a few long-term care insurance policies that cover short-term hospice care.

Most long-term care policies cover the following services:
Home Health Care
Home health care typically involves a Certified Nursing Assistant (CNA) or home health aide. The last several years have proven to be tough for finding reliable help, as turnover is rampant in the industry. According to Indeed, the average salary for a CNA is between $13.67 and $28.19. In my own experience dealing with businesses, lower pay correlates to higher turnover.
Respite Care
Respite care offers short-term relief for primary caregivers. Respite care helps take some pressure off of the family, as caring for a loved one can be an arduous activity that often requires physicality and patience. In many cases, seniors care for their spouses while needing assistance themselves. This kind of situation can take a toll on the health of the more capable partner.
Adult Day Care
Adult day care — also called adult social day care, adult day health care and specialized adult day care — provides a setting for seniors with particular severe health conditions. These conditions include dementia and Alzheimer’s disease, among others. Adult day care facilities provide services like professional supervision, social activities, meals, medication management, therapy and exercise.
Assisted Living and Nursing Home Facilities
According to the National Institute on Aging, assisted living is for seniors who need care daily, but not to the extent of needing the comprehensive services of a nursing home. Nursing homes tend to focus more on medical care than on the social activities available at assisted living facilities.
Dementia and Alzheimer's Care
Long-term care policies generally cover dementia ailments, though the specific terms of each policy vary depending on the insurance company or carrier. That being said, coverage may be disqualified once symptoms appear, since they could be considered a preexisting condition. Alzheimer’s special care facilities are typically covered to address the specific needs associated with the disease.

Finding the right fit for you or your loved one can be difficult, and examining your policy for any coverage limitations is an important part of your due diligence.

Whether covered by a policy or not, this type of care is expensive.

The average costs for some of the aforementioned services are below:
  • The average daily rate for adult day care services (up to eight hours) is approximately $78.
  • The average rate for one day at an assisted living facility is $148.
  • The average cost of in-home respite care is $27 an hour, or $169 per week.
“With the statistically significant likelihood that most people will need some type of long-term care services, it is vital to understand what kind of services long-term care insurance will and will not cover.”
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What Long-Term Care Insurance Doesn’t Cover

Long-term care insurance policies, both traditional or hybrid, are becoming more and more popular — especially among the age group between 50 and 75 years old who have the assets to cover the cost. But long-term care insurance does not cover every type of care possible.

Consider the following limitations when choosing a policy:
  1. Long-term care insurance typically doesn’t cover unlicensed care. So, while you may prefer to use a family, friend or acquaintance for care, the arrangement may not be acceptable by your insurance carrier. Long-term care insurance also rarely covers medical care costs, as these are typically covered by private health insurance or Medicare.
  2. The vast majority of long-term care policies also have a maximum benefit period. This period usually ranges from 3 to 8 years, meaning your policy would not cover any care needed beyond that timeframe.
  3. Understand the elimination period, or the waiting period before a policy pays benefits, of the policy you pick. For example, if you have a 90-day elimination period, benefits will not be paid for approximately the first three months. If you need assistance for only 75 days, you will not receive coverage for your particular situation.
  4. During underwriting, your health history will be examined. Your policy may not cover you, or your application may be denied, based on the severity of any pre-existing conditions. Pre-existing conditions have been a hot-button issue since the passing of the Affordable Care Act.
  5. Traditional long-term care policies do not offer life insurance benefits, surrender value or salvage value. If you do not use the policy, you lose it.
  6. Lastly, do not confuse long-term care with a disability insurance policy. A long-term care policy will not cover loss of income.

By understanding what’s covered and the limitations of your policy, you can make informed decisions when selecting the right long-term care insurance plan for you or your loved one.

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Last Modified: October 25, 2023

7 Cited Research Articles

  1. Forbes Health‌. (2023, June 21). What Is Adult Day Care? Retrieved from https://www.forbes.com/health/healthy-aging/what-is-adult-day-care/
  2. American Bar Association. (2022). Dementia Care in Long-Term Care Insurance Policies. Retrieved from https://www.americanbar.org/groups/senior_lawyers/publications/voice_of_experience/2022/voice-of-experience-february-2022/dementia-care-in-long-term-care-insurance-policies/
  3. ‌U.S. News & World Report. (2022). Respite Care: Giving Family Caregivers a Break. Retrieved from https://health.usnews.com/senior-care/articles/respite-care-giving-family-caregivers-a-break
  4. LifeHappens.org. (2020, August 4). What Kind of Care Does Long-Term Care Insurance Cover? Retrieved from https://lifehappens.org/long-term-care-insurance-101/what-kind-of-care-does-long-term-care-insurance-cover/
  5. National Institute on Aging. (2017). Residential Facilities, Assisted Living, and Nursing Homes. Retrieved from https://www.nia.nih.gov/health/residential-facilities-assisted-living-and-nursing-homes
  6. National Institute on Aging. (2017). What Is Respite Care? Retrieved from https://www.nia.nih.gov/health/what-respite-care
  7. Alz.org. (n.d.). Planning Ahead for Long-Term Care Expenses. Retrieved from https://www.alz.org/media/documents/alzheimers-dementia-plan-ahead-long-term-care-expenses-ts.pdf