LT health care plan denied payment was purchased as a home plan. She is in AL. Said plan is only good if care is at her home. Do we cancel?

I would talk to a lawyer but I would argue that the Assisted Living IS her home. She gets mail there, probably has registered to vote using that address. If she has a State ID it probably has the address of her AL listed as her residence.

Your state's insurance commissioner's office may be of some help. Contact them for assistance. That office licenses companies operating in the state and should have some oversight in whether or not they are operating according to their responsibilities.

This sounds like a "weasel worded" excuses.  I echo what others have written:  have the plan reviewed by an attorney, someone familiar with long term care plans.

I'd have a lawyer look over the policy and not just take the insurance company's word for this. Since it was purchased as a Home Care Plan it would seem there should be some definition provided of what is considered "home". Where my dad is at an assisted living apartment (called a "retirement community") it is his home - it's his official address, his voting address, and he has a yearly lease just like any other apartment building. I'm also able to hire outside help in addition to the services provided by the facility. There are also independent living apartments in the building and the only difference is that with assisted living you contract for a level of care which is a separate bill. The insurance company is going to do everything possible to not pay anything and hope that when they object you just go away. I strongly worded letter from a lawyer sometimes gets them to re-evaluate.

Are you planning on returning her to her home? If not then I don't see why you would continue to pay a premium for something you cannot use. If you want to be picky, an Assisted Living is her home. And she is paying to be cared for. She is considered a resident not a patient. Her care needs are separate from her room and board.

Might be a good idea to have a lawyer look over the contract.

I’d have a lawyer look over the policy to determine your next steps. In my family the LTC policy my parents paid for at great cost proved useless. It merely delayed the time before Medicaid was required as it was completely exhausted in less than a year