Choosing the right assisted living facility is crucial to making your golden years everything they can be. But the best senior living communities can sometimes come with a hefty price tag.
If you’ve been scrolling through assisted living sites for hours, looking at their rates and crunching the numbers to see if they fit within your budget, you may be wondering:
Does insurance cover assisted living costs?
We’ll help you find the answer to that question and many more. We’ll also explore your insurance options and other ways to help cover the costs of assisted living.
Does Insurance Pay for Assisted Living?
So, is assisted living covered by insurance?
The short answer is no. Most insurance policies do not pay for assisted living.
But that doesn’t mean that you are stuck without a way to afford the care you need. Your regular health insurance plan might not cover assisted living, but there are insurance policies designed specifically for this type of care with various payout options.
You also may have other avenues available to cover the costs of assisted living, which we will explore later.
Does Assisted Living Insurance Exist?
If you search for “assisted living insurance,” you probably won’t see any companies directly offering it.
You will, however, find long-term care insurance.
Let’s dive into exactly how this works.
Long-Term Care Insurance and Assisted Living
Long-term care insurance helps to cover the cost of nursing homes, in-home assistance, and assisted living. It is designed specifically to help you pay for what you need without breaking the bank.
Does long-term care insurance cover assisted living facilities?
Yes, in many cases.
Most long-term care insurance policies cover at least some parts of assisted living. The best way to find out your coverage is to contact your agent and have them walk you through what you’re paying for.
When Should You Purchase Long-Term Care Insurance?
The best time to buy long-term care insurance is before you need it and when premiums are lower. Most long-term care insurance customers are typically 50-65 years old.
If you’re over 70, it may be challenging to procure long-term care coverage because of:
- Pre-existing conditions
- Your general health
- High premiums
- Individual insurance company policies
If you’re planning ahead and looking into this option, there’s still time to buy. If you’re an older adult who may not qualify, we’d still advise you to contact a variety of insurance companies and see what’s available, especially if you’re in excellent health.
When Does Long-Term Care Insurance Coverage Begin?
The start date of your coverage is determined by the terms and conditions of your policy. To qualify for benefits, you typically need to meet certain criteria, known as benefit triggers. These are often based on cognitive impairments or the level of assistance you require with daily activities. After the insurer evaluates your needs and approves your care, they will provide details about the specific benefits you’re eligible for.
Most policies include a waiting period, also referred to as the elimination period, before benefits begin. During this time, you’ll be responsible for paying for services out of pocket, which usually lasts between 30 and 90 days. Once the waiting period ends, the insurer will start reimbursing you for the services you receive.
Other Tips About Long-Term Care Insurance for Assisted Living
If you’re thinking about buying long-term care insurance for yourself or a loved one, here are some important things to keep in mind while shopping around.
- There are many factors that can affect how much you’ll pay. These may include your age, sex, and current health conditions or health history.
- You may want to invest in a hybrid life insurance plan with an LTC rider. A hybrid policy is essentially life insurance and long-term care insurance bundled into one plan. This eliminates the typical “use it or lose it” insurance trapmany policies come with, allowing the money you invest in your future to come back to you.
- Check to see if your state offers partnership plans. Some states offer Medicaid incentives to help residents get long-term care insurance, allowing you to keep assets you’d usually have to spend to get under the qualifying limit.
Can I Use My Life Insurance Policy to Cover Assisted Living?
Using your life insurance policy to cover the costs of assisted living could be a great option to consider. But before you make the call to your agency, there are a couple of things you might want to think about.
If you have a life insurance policy with a higher face value, you may be able to use it to help pay for assisted living. Some life settlement providers accept policies with face values as low as $50,000, although eligibility requirements vary.
Using your life insurance policy to pay for assisted living has pros and cons.
Some of the pros are:
- You get money fast.
- You no longer have to worry about paying that pesky premium.
- You no longer have to manage your life insurance policy.
- Since the money goes to the facility and not to you directly, you may still qualify for Medicaid if your funds are used up.
Despite those great advantages, there are some drawbacks:
- It may not be the most economically logical solution.
- You won’t be getting the whole face value of your policy.
- This closes out your life insurance policy, meaning that in the event of your passing, your family will not receive any money from it.
Converting your life insurance policy to pay for assisted living care is an option worth considering, but you need to examine the details closely to see if it’s the right one for you. Before making a huge financial decision like this, especially when it comes to insurance, you should always speak with professionals, and in this case, your insurance agent.
How Insurance May Help with Assisted Living
As a rule, insurance (unless it is long-term care insurance) does not usually cover assisted living directly. However, it may still cover some related costs, including:
- Medications
- Hospital needs
- Doctor visits
- Doctor-prescribed needs
Depending on the policy, insurance may even cover transportation costs for seniors who find it difficult to drive safely. However, many assisted living communities offer transportation services, so this may not even be an issue.
Just because your health insurance doesn’t cover assisted living doesn’t mean that it won’t still cover many of the other associated medical expenses you might have.
Other Financial Assistance Options Available for Assisted Living Costs Not Covered by Insurance
The cost of assisted living can be high. But you’re not alone as you search for the best financial solutions.
Beyond insurance, you have other options to address the financial side of your assisted living stay. Here are some programs and benefits you could be eligible for.
VA Aid and Attendance Care
If you are a veteran, the VA Aid and Attendance Care Benefit could be a great resource to consider.
This is a benefit that provides monthly payments, in addition to your pension, that can help with your housing and care costs. If you could use an extra pair of hands to assist you with daily living activities, this might be a great resource for you.
Tribal Long-Term Care Services
If you are a part of the Indigenous community, you may qualify for tribal long-term services and support (LTSS).
In addition to helping to cover the costs of assisted living to help ensure independence, healthy living, and quality of life, this program works to keep you connected to your tribal community.
State-Specific Assistance
It is also possible that your state offers specific programs designed to assist you with financial support for your assisted living stay.
State assistance is different from Medicaid and Medicare and can be an incredibly helpful resource. Check your state’s government website to look for programs you might qualify for.
Frequently Asked Questions About Assisted Living Costs and Insurance
How Is Most Assisted Living Care Usually Paid For?
Most people pay for assisted living out of their own pockets, using a mix of personal income, savings, retirement funds, or long-term care insurance. Some also use life insurance, annuities, or other assets to help with these costs.
In some cases, public programs can help with costs. Medicaid programs are different in each state and may cover some long-term care services. Veterans might qualify for benefits to help pay for care. However, Medicare does not cover long-term care.
What Is Not Covered Under Long-Term Care Insurance?
Long-term care insurance can help pay for assisted living and other long-term care services, but each policy is different. Your plan might set limits on how much it pays each day, how long it provides benefits, or the total amount it will cover. Some policies only pay for certain types of facilities or services.
You might need to pay for care yourself during the policy’s waiting period before your benefits start. It’s important to read your policy closely so you know its coverage limits, waiting period, what services are included, and how much it will pay.
What Is the Average Cost of Assisted Living in the U.S.?
The Congressional Research Service reports that in 2024, the national median cost for assisted living was $5,900 per month, or $70,800 per year. Costs can be higher or lower depending on your location, the community you pick, and the services you require.
If you are thinking about moving to assisted living, be sure to ask each community about their monthly rates, what is included in the basic fee, and whether there are extra charges for certain services or higher levels of care.
What Is the Biggest Drawback of Long-Term Care Insurance?
A major downside of long-term care insurance is how much the premiums can cost. The amount you pay depends on your age when you buy the policy, the coverage and benefit limits you pick, and any extra benefits you add. Premiums can also go up as time passes.
You should also know that policies often limit how much and how long they will pay for care. Some only cover benefits for a certain number of years, while others might offer coverage for life. Before you buy a policy, think about whether you can keep up with the premiums over time and if the benefits will be enough for the care you might need later.
Senior Services of America Assisted Living Facilities: Where Seniors Enjoy Positive Experiences Every Day
Senior Services of America’s facilities are built to be the community you didn’t know you were missing and the home you’ve always wanted. We exist to provide seniors with positive experiences every day.
No two people are the same, and no two care plans should be either. That is why we customize your care plan to ensure that you have all the independence you want and all the assistance you need.
In our communities, you can find:
- Beautiful floor plans designed to suit your unique needs
- Picturesque gardens
- Restaurant-style dining with a variety of healthy and delicious meals
- Assistance with your personal needs such as bathing, dressing, and personal care
- Crafting and other activities
- Housekeeping services
- And so much more
Our communities are truly one-of-a-kind, and we would love to help you find a senior living community near you. Contact us today to get started.
