This type of private insurance policy can help pay for many types of long-term care, including both skilled nursing and non-skilled nursing care.
Long-term care insurance coverage can vary widely. Some policies may cover only nursing home care. Others may include coverage for a whole range of services like care in an adult day care center, assisted living, Alzheimer's assisted living, medical equipment, and formal and informal home care.

By Michelle Andrews

When Betty Hoff moved into an assisted-living facility in Fowler, Calif., two years ago, the 86-year-old thought she didn't have anything to worry about financially. She had a long-term-care insurance policy that would pay up to $3,000 a month for three years of nursing home, assisted living, or home care. Hoff has severe arthritis and can get around only with a walker or cane, which means she could no longer cook, clean, or do the laundry. But her insurer denied the claim. Hoff wasn't cognitively impaired, and the company said she didn't need help with enough "activities of daily living," or ADLs, to qualify for benefits.