Long-term Care versus Life Care

Understanding differences between long-term care (LTC) insurance versus Life Care plans can be a bit baffling.

Many people are concerned about outliving their financial resources. What happens if I am diagnosed with Alzheimer’s disease? Would a health care crisis wipe out my estate? If I’m sent to a nursing home, how many days are covered? Is home care an option? Do network providers offer high-quality care? These are all common questions that Life Care and LTC insurance are designed to address, but making a decision you’re comfortable with can have a major impact on future physical, mental and financial health.  

While they have certain similarities, such as state regulation, these are very different products. It’s like comparing apples to oranges, really.

One lasts only as long as payments continue, covering specific health crises situations common to older adults, such as assisted living and memory care – while the other is designed to protect retirement assets through the remainder of someone’s life, no matter what may happen to their health or financial status.  One has very specific criteria governing its use, including waiting periods, policy maximums and requirements that need to be met before accessing benefits like any health care insurance policy, and the other is focused on health and wellness, allowing the insured to live an independent lifestyle as long as possible, giving you peace of mind.

Let’s explore the two.

What is a Long-Term Care Insurance Policy?

Long-term care insurance is a policy that helps pay for long-term care over an extended amount of time, filling gaps not covered by health insurance, such as Medicare and Medicaid.

It covers specific costs for a closely defined scope of services, such as extended skilled nursing care to recover from a lengthy illness or surgery beyond what the original health insurance will cover, and live-in memory care and assisted living facilities. Some policies will cover in-home caregiver services to assist with activities of daily living such as eating, bathing, dressing, toileting, and transferring.

LTC insurance requires an initial eligibility process, a monthly or annual payments to continue eligibility and has coverage limitations.

What is Life Care?

In contrast, Life Care is an all-encompassing form of insurance that aims to keep you independent for as long as possible within a specific community. It usually includes a buy-in cost up front, and sometimes an additional monthly fee, depending on the plan purchased.

Housing may also be included, if it is a Life Care community similar to Sun Health Senior Living’s retirement communities, or


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it may be limited to a plan that includes live-in facilities when needed but no independent living housing, similar to the Sun Health at Home plan. Either plan ensures lifetime coverage, seamlessly providing care within their community, which includes a medical center with physicians, registered nurses, physical therapists and other professional care providers.  

And the biggest benefit? Peace of mind. If the insured should have their financial circumstances change, such as an economic downturn that consumes their life savings, benefits don’t cease: they are guaranteed lifetime care, without a change in service.

Depending on the scope of the Life Care plan and what’s available at the specific community, services can include everything from wellness and fitness activities, transportation and meals to assisted living, memory care, and extended skilled nursing care.  

Similarities vs. Differences

What are the differences and similarities of long-term care insurance and a Life Care plan? Let’s take a closer look.


Both of these insurance options provide long-term care that covers gaps left by typical health insurance policies, Medicare or Medicaid, but…

Long-term care insurance requires a monthly or yearly premium payment, with the policy in effect only as long as you continue to make your payments.

Life Care includes a buy-in fee and may have additional monthly payments. The amount of each depend on the plan selected. However, this ensures lifetime coverage, even if your financial situation changes and you are no longer able to make a monthly payment.


Various levels of coverage are available with both options and can include different benefits of your choosing, but…

Long-term care insurance policies have coverage and provider limitations, plus a lifetime benefit maximum, so it’s possible that you could exhaust your benefits or need out-of-network providers that are not covered by the policy.

Life Care has no limitations on coverage provided within the community, and no lifetime benefit maximum. The insured can seamlessly shift between services whenever it’s required. No matter what long-term care needs arise or how expensive care becomes, you are covered for life.


Both are a financial investment in addition to general health insurance, but…

Since long-term care insurance coverage can be exhausted and limitations of care apply, it is difficult to budget for extensive long-term expenses. It is possible to have LTC insurance coverage and still run out of money.

Life Care covers has predictable costs and covers the long-term care services that you may need for the rest of your life. It guarantees you will never need to rely solely on your assets to pay for long-term  care, allowing you to enjoy retirement without worrying about the future.


You must pass a health screening to meet certain baseline criteria for coverage, but…

With long-term care insurance, certain pre-existing conditions will increase the cost of your policy, or may lead to denial or exclusions. There is no financial qualification other than the insured making sure they can afford the monthly premiums for the remainder of their life. With most long-term care insurance programs, if the monthly payments cease, the policy and its benefits will terminate.

With Life Care, you must pass a more robust health screening to verify meeting a certain level of health and independence, plus financial screening to meet financial criteria. This product generally appeals to those with higher net worth and retirement investments to support their income.


Both insurance policies offer coverage long-term care needs, but…

With long-term care insurance, if you need options such as assisted living, memory care or extended skilled nursing care, you or your caregiver will need to find a place that accepts your long-term care insurance.

Life Care services are guaranteed available, should you need it, and offered within a single campus or provider. Some offer standalone Life Care services, while others are a Life Care community that offers housing for active, independent adults as a standalone retirement community, in addition to the medical care centers on campus. If evaluating a community, rather than a plan, it’s especially important to consider its lifestyle, location and other features, as you would for considering any independent living retirement community.


Not only are the coverages different, but…

One is simply coverage for medical costs, while the other is a lifestyle, an investment in long-term health and wellness to age more successfully.

Long-term care insurance policies cover certain costs with certain types of providers, up to a maximum dollar amount.

Life Care provides all health care, but is also focused on health and wellness services intended to keep you OUT of its medical center. Life care is focused around a model of successful, independent aging. Its communities are modeled after evidence-based care models. Services such as nutritional counseling, wellness and fitness coaches and more are often part of the program.

Sun Health Senior Living offers exceptional non-profit life care communities in Arizona. Click here for more information, or download our latest eBook, “Your Step-by-Step Guide to Choosing a Life Care Community.

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