A long-term care insurance policy generally pays for services (up to your policy limit) to help you with activities of daily living or if you have a cognitive impairment. These services typically include home health care, adult day care, assisted living, bed reservation, nursing home, respite care, hospice care, stay-at-home benefits, and care coordination, but what doesn’t a long-term care insurance policy cover?

The things a policy won’t cover are called limitations and exclusions.

Limitations and Exclusions

Insurance companies typically will not pay benefits for:

  • a loss from suicide, attempted suicide or intentional self-inflicted injury
  • a loss from alcoholism or drug addition (except for an addiction to a prescription med when taken in accordance with the advice of your doctor).
  • a loss from war or act of war
  • treatment provided in a government facility (unless otherwise required by law) except a Veterans Administration facility.
  • care outside of the U.S., it’s territories, Canada or the UK, unless you specifically have “international benefits.”
  • services when there isn’t normally a cost associated with that service (i.e., if you have a local volunteer group that helps seniors and doesn’t charge for their services).
  • services provided by an immediate family member (if it’s a reimbursement policy), unless:
    • they’re a regular employee of a facility or agency that provides the covered services
    • the facility or agency receives the payment for those services
    • they don’t receive compensation other than the normal compensation for employees in their job category

However, if you have a cash indemnity policy, family members can be paid to provide care for you.

Non-Duplication of Benefits

A policy will not duplicate benefits for portions of covered expenses paid or payable:

  • by Medicare
  • by any other governmental program (except Medicaid), including the Veterans Administration
  • by any state or federal workers’ compensation, employer liability, or occupational disease law, or any vehicle no-fault law.

An obvious exclusion is if your policy is not in-force. If your policy requires regular premiums and you stopped making those payments and your policy lapsed, you no longer have coverage and they won’t pay benefits.

The Bottom Line

Long-term care insurance policies provide valuable benefits, but you should know the limitations and exclusions.